Existing Home Sales, Prices, Inventory All Rise

The National Association of Realtors reported that existing home sales rose 0.8 percent, from an upwardly revised annual rate of 4.94 million units in January to 4.98 million in February, as both home prices and the number of homes for sale rose. Only the rise in inventory was a surprise.

The supply of unsold homes – a key factor behind the recent rise in home prices – surged 9.6 percent, from 1.74 million units to 1.94 million, as the months of supply metric jumped from 4.3 months to 4.7 months in February, the highest level in three months.

The median home price was unchanged at $173,600, representing an increase of 11.6 percent from a year ago, and sales of distressed homes accounted for 25 percent of last month’s home purchases (15 percent foreclosures and 10 percent short sales), down sharply from a 34 percent share last year at this time. All cash sales rose from a 28 percent share in January to 32 percent last month and investors were responsible for 22 percent of all sales, up from 19 percent the month before.

Chief Economist Lawrence Yun was optimistic, noting “Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise. Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable. The only headwinds are limited housing inventory, which varies greatly around the country, and credit conditions that remain too restrictive.”

via Iacono Research http://iaconoresearch.com/2013/03/21/existing-home-sales-prices-inventory-all-rise/