Existing Home Sales Dropped In February

10% Drop in Home Sales Last Month

Existing Home Sales fell 10 percent last month, according to a report from the National Association of REALTORS®. This was quite a surprise.

On an annual basis, 4.88 million homes were sold in February — the first time annualized home resales dropped below 5,000,000 since November 2010.

An “existing home” is one that’s not considered new construction. It’s an important differentiation.

And it’s not just sales volume that’s down. Home inventory is higher, too. At the current pace of sales, the number of months needed to sell the complete home resale inventory rose by 1.1 months, to 8.6 months nationally.

It’s the biggest one-month jump in supply since July 2010 — the month after last year’s federal home buyer tax credit program expired.

The data is somewhat unexpected, too. NAR’s Pending Home Sales report is a reliable predictor for the housing market and, based on recent findings, home sales were projected to climb in February. It’s unclear why they didn’t.

The Silver Lining: First Time Home Buyers Were Up

Regardless, the February sales data reveals an interesting breakdown by buyer-type. Notably, the percentage of first-time home buyers in the market grew by more than any other segment.

First-time home buyers : 34% of all sales, +5% from January
Repeat buyers : 47% of all sales, -1% from January
Real estate investors : 19% of all sales, -4% from January

Statistics also showed that cash buyers represented 33 percent of all sales, up 1 tick from the month prior.

For Urbandale home buyers, February’s Existing Home Sales data suggests more home supply and lower home prices this spring. However, rising mortgage rates could eliminate the monthly savings attributed to falling home values.

To get the most from your mortgage-buying dollar, lock while rates are low. If you’d like to do that with us, reach out via email or by phone at the number listed on the right hand side of this page.