Existing Home Sales Decline Month-Over-Month and Year-Over-Year in February

The National Association of Realtors® (NAR) reported on Friday (3-25-22) that total existing home sales (completed transactions for single-family homes, townhomes, condominiums, and co-ops) dropped -7.2% month-over-month in February to a seasonally adjusted rate at 6.02 million homes. Each of the four major U.S. regions saw sales fall on a month-over-month basis.

Year-over-year, sales are down -2.4% (6.17 million in February 2020). Regionally, sales activity year-over-year was also down overall, though the South experienced an increase while the remaining three regions reported drops in transactions.

Total housing inventory at the end of February totaled 870,000 units, up 2.4% from January 2022, and down 15.55% from February 2021 (1.03 million). At the end of February, unsold inventory was at a 1.7-month supply at the current sales pace—up from the record low supply of 1.6 months January 2022 and down year-over-year from the February 2021 rate of 2.0 months.

The median existing-home price for all housing types in February was $357,300, up 15.0% from February 2021 ($310,600). Prices grew in each region. This marks 120 consecutive months of year-over-year increases, the longest-running streak on record.

In a statement prepared for the release of February’s existing home sales, Lawrence Yun, NAR’s chief economist said, “Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases. Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate. Monthly payments have risen by 28% from one year ago—which interestingly is not a part of the consumer price index—and the market remains swift with multiple offers still being recorded on most properties.”

Yun added that rising rates and escalating prices have prevented many consumers from making a purchase. “The sharp jump in mortgage rates and increasing inflation is taking a heavy toll on consumers’ savings.”

However, he said, “I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”