Existing-home sales sputtered in February as lower-than-low inventory kept a lid on activity, the National Association of REALTORS® (NAR) reports. Existing-home sales totaled 5.48 million, a 3.7 percent slip from a decade-high in January and a 5.4 percent hike from one year prior.
“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,” says Lawrence Yun, chief economist of NAR. “Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market.”
Though existing-home inventory expanded to 1.75 million in February, supply is still 6.4 percent below one year prior—and last month marked the 21st month in a row of the downtrend, according to the report.
“The bad news is that February existing-home sales are down 3.7 percent from January, which more than eradicates the growth in sales we saw in January,” says Joseph Kirchner, senior economist at realtor.com®. “The good news is that sales are up 5.4 percent from a year ago.
“The culprits for the reported drop are declining affordability and lack of inventory,” Kirchner says. “There are plenty of buyers in the market, but they are unable to find the homes they want at the prices they can afford. These affordability challenges are the result of inventory shortages—which leads to bidding wars—and rising mortgage rates, resulting in higher monthly payments. We see the largest inventory shortages among the most affordable homes, which also saw the greatest decline in sales with homes under $100,000 down 15 percent from a year ago.”
“Our biggest challenge is lack of inventory in the entry and move-up price points,” confirmed Rei Mesa, CEO of Berkshire Hathaway HomeServices Florida Realty, in a recent interview for RISMedia’s soon-to-be-released 2017 Power Broker Report. “
Original Source: RIS Media Article
Ed and Celia Maddox
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Edward Maddox, Associate Broker, MRE, GRI, ABR
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