Existing-home sales figures released Thursday by the National Association of Realtors (NAR) matched market forecasts for February—unfortunately, those forecasts called for a slight decline.
According to NAR’s sales data, total existing-home sales—including single-family homes, townhomes, condominiums, and co-ops—declined 0.4 percent last month to a seasonally adjusted annual rate of 4.60 million, matching a consensus forecast among economists surveyed by Bloomberg. Following January’s decline, February took the new record for having the slowest sales pace since July 2012.
Year-over-year, February’s rate of sales was down 7.1 percent.
Looking at only single-family transactions, NAR says sales edged down a smaller 0.2 percent to an adjusted annual rate of 4.04 million, falling 6.9 percent below the same month last year.
NAR chief economist Lawrence Yun pinned the ongoing decline on limited inventory conditions, rising prices, and severe winter weather—factors that also plagued the market in January and December.
“We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago,” Yun said.
However, he added, “Some transactions are simply being delayed, so there should be some improvement in the months ahead.”
Regionally, existing-home sales were down in the Northeast and the Midwest, falling 11.3 percent and 3.8 percent from January, respectively. The story was different in the South and West, where sales rose 1.5 percent and 5.9 percent to top a pace of 1.0 million.
The median existing-home price for all housing types in February was $189,000, a 9.1 percent annual improvement. On just the single-family side, the median price was up 9.0 percent to $189,200.
“Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years,” Yun said.
Breaking down sales data, NAR reports first-time buyers accounted for 28 percent of purchases in February, settling on the middle ground between January’s 26 percent and February 2013’s 30 percent. Meanwhile, all-cash sales comprised 35 percent of transactions, with investors accounting for 21 percent of home sales.
NAR president Steve Brown said the ongoing weakness in first-timers—many of which are Millennials—stems from debt issues.
“The biggest problems for first-time buyers are tight credit and limited inventory in the lower price ranges,” Brown said. “However, 20 percent of buyers under the age of 33, the prime group of first-time buyers, delayed their purchase because of outstanding debt.”
In fact, Brown added, a survey of recent first-time buyers showed that among young consumers who took longer to save for a down payment, 56 percent pointed to student debt as the biggest hurdle—to say nothing of those who aren’t yet even in the market.