[ad_1]
WASHINGTON: US sales of existing homes rose more than expected in February as a decrease in mortgage rates and the first year-over-year reduction in prices in 11 years pulled buyers back into the market, further evidence that housing The market was stabilizing at lower levels.
A boom in the sale of pre-owned homes, as reported by National Association of Realtors On Tuesday, that was the biggest in more than 2-1/2 years and ended 12 straight monthly declines in sales, the longest such stretch since 1999.
The housing market has been the biggest victim of aggressive interest rate hikes delivered by federal Reserve In its fight to contain high inflation. The increase in sales added to housing starts and homebuilder confidence to suggest that the housing market was perhaps finding a floor.
“It’s too early to declare a slowdown in home sales, but the fall in mortgage rates allowed buyers to dip their toes back into the market, as did affordable prices,” said chief economist Christopher Rupkey. FWDBONDS In New York,
Existing home sales, which are counted at the end of a contract, rose 14.5% last month to a seasonally adjusted annual rate of 4.58 million units. February sales likely reflect contracts signed a few months back. Mortgage rates decreased from mid-November to early February before rising again. Home sales may fall in March.
Last month, sales increased in all four regions, with double-digit increases in the Midwest, West and the densely populated South. Wholesale sales were concentrated in the $250,000-$500,000 price range.
Economists polled by Reuters had forecast home sales would rise 5.0% to 4.20 million units. Home resales, which make up a large portion of US housing sales, fell 22.6% in February on a year-over-year basis.
residential Investment has contracted for seven consecutive quarters, the longest such streak since the collapse of the housing bubble caused by the Great Recession of 2007–2009.
The worst is likely over. A survey last week showed that the National Association of Home Builders/Wells Fargo Housing Market Index rose for the third month in a row in March, although homebuilder sentiment remained depressed. Single-family housing starts and construction permits start rolling out again in February.
Mortgage rates, which resumed their upward move in February, are falling again with a sharp drop in US Treasury yields following the recent collapse of two US regional banks, which sparked fears of a contagion in the banking sector. But the outlook for the housing market remains unclear.
The Fed is expected to raise interest rates by another quarter of a percentage point on Wednesday, according to CME Group’s FedWatch tool, despite volatility in the financial markets.
Financial conditions have tightened, due to which banks may become tighter in lending. This could hit small businesses, which have been the main drivers of job growth, and potential homebuyers.
“There is still the possibility that tightening lending standards will mean that applications for (mortgage) purchases will not directly translate into actual purchases,” said Veronica Clark, an economist at Citigroup in New York. “Upcoming weakness in the labor market will also be a risk to strong housing demand and prices.”
US stocks were trading higher. The dollar fell against a basket of currencies. US Treasury prices fell.
supplies are still tight
The median existing home price fell 0.2% from a year earlier to $363,000 in February. This was the first annual price decline since February 2012. Prices declined on a year-over-year basis in the Northeast and West, the most expensive housing regions. They continued to grow in the Midwest and South, which are generally considered more affordable.
The South experienced an influx of people during the COVID-19 pandemic as companies allowed workers to work from anywhere in the country. “There are strong sales gains in areas where home prices are coming down,” said Lawrence Yun, chief economist at NAR.
There were 980,000 pre-owned homes on the market last month, which was unchanged from January and a 15.3% increase from a year earlier. At February’s sales pace, it will take 2.6 months to liquidate the existing inventory of existing homes, up from 1.7 months a year ago. Four to seven months’ supply is seen as a healthy balance between supply and demand.
Housing prices are unlikely to fall further given the limited supply.
Properties typically remained on the market for 34 days last month, up from 33 days in January. Fifty-seven percent of homes sold in February had been on the market for less than a month.
First-time buyers account for 27% of sales, up from 29% a year ago. Transactions accounted for 28% of all cash sales, compared to 25% a year earlier. Individual investors or second home buyers bought 18% of the homes, down from 19% last February. Distressed sales, foreclosures and short sales represented only 2% of sales, little changed from a year earlier.
Conrad DeQuadros said, “The data suggest there is a bid down market that could limit further declines in home prices unless mortgage rates rise sharply again, and encourage our belief that home values will continue to recover.” The final decline in will be only a moderate.” Senior Economic Advisor at Brain Capital in New York.
[ad_2]
Source link