Existing Home Sales Rise in February, Breaking a Year-Long Streak

03/22/2023 Kurt Long NAFCU

ARLINGTON, Va.—Existing home sales rose 14.5% in February to a seasonally adjusted annual rate of 4.58 million units, breaking a 12-month decline streak and representing a 22.6% decrease compared to a year ago.

Curt Long

“A lack of inventory buoyed prices during that year-long span, and supply remains extremely tight,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Nevertheless, the median sales price declined on a year over year basis in February, ending the longest streak of increases on record.”

Existing home sales in February were up across regions, with the West leading (+19.4%) followed by the South (+15.9%), Midwest (+13.5%) and Northeast (+4%). Based on current sales, there were 2.9 months of supply at the end of the month; analysts consider 6 months of inventory a rough balance between supply and demand.

In addition, the median existing home price – not seasonally adjusted – rose 0.5% in February to $363,000.

Data Point From Midwest

“The cause of the decline in the median price is likely expanding sales of lower priced homes rather than a broad decline in home values,” Long said." In the Midwest, almost 40% of sales in February were of homes priced from $100,000-$250,000.

“Rates have been volatile recently, but with concerns over financial stability, there is more downside rate risk than has been present lately. Even if rates don’t materially decline, the market seems to have found equilibrium and there should not be further volume declines from January’s low point," said Long.