Sales of existing single-family homes which includes townhomes, condominiums and co-ops fell 3.7% to a seasonally adjusted annual rate of 5.48 million in February from 5.69 million in January, according to the latest report from the National Association of Realtors (NAR).
February’s sales pace is 5.4% higher than a year ago, after a small decline in January.
First-time buyers were the main driving force behind sales in February with a 32% market share, down from 33% the previous month but up from 30% a year ago.
The NAR said that median existing-home price for all housing types in February was $228,400, up 7.7 percent from February 2016 ($212,100). February’s price increase was the fastest since last January (8.1 percent) and marks the 60th consecutive month of year-over-year gains.
More properties came on the market for sale in February with an increase of 4.2% to 1.75 million existing homes available for sale. However, sales are down 6.4% than a year ago (1.87 million) and decreased year-over-year for 21 straight months.
There is a 3.8-month supply of housing inventory at the current sales pace (3.5 months in January).
All cash buyers led the buying charge with 27% of transactions in February, up from 23% in January and 25% a year ago. Housing investors had accounted for 17% of homes sold in February, up from 15% in January but down from 18% a year ago. Seventy-one percent of investors paid in cash in February (matching highest since April 2015), according to NAR.
Lawrence Yun, NAR chief economist, attributed the drop in sales to a lack of housing inventory which has pushed up home values and demand.
Yun had said, “Realtors® are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” he said. “Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market.”
Added Yun, “A growing share of homeowners in NAR’s first quarter HOME survey said now is a good time to sell, but until an increase in listings actually occurs, home prices will continue to move hastily.”