• February existing home sales fell sharply from January, down 7.1 percent to 5.08 million units (SAAR).
• Along with inventory and affordability concerns, adverse weather across much of the country contributed to low pending sales in January, which spilled over into a lower-than-expected number of February closings.
• The median seasonally adjusted price of U.S. existing homes sold in February fell 2.2 percent from January. The median price of existing homes sold in February fell from January in every region except the West, where it rose 7 percent month-over-month.

February existing home sales fell 7.1 percent from January, to 5.08 million units at a seasonally-adjusted annual rate (SAAR) in February, according to the National Association of Realtors (figure 1).

The decline was larger than expected and can be attributed largely to a combination of tight supply, affordability concerns and January’s wintry weather which led to fewer pending sales then and fewer closings in February.

February existing home sales were up 2.2 percent over the year. Setting aside weak November 2015 numbers associated with changes to existing regulations, February represents the lowest annual pace of growth in existing home sales since late 2014 and the largest month-over-month drop since May 2010.

Condo and co-op sales fared slightly better than single-family home sales, with the former falling 6.6 percent over the month, versus 7.2 percent for the latter. Condo sales fell particularly sharply in the South, although single-family sales held up well in the region. Single-family sales fell most in the Midwest and Northeast.

Despite fewer sales, for-sale inventory continued to edge downward, falling 1.5 percent in February from January. When sales decline, inventory traditionally increases as home stay on the market longer. But that did not occur in February. Inventory hit bottom in early 2013 before increasingly modestly through the end of 2014, but it has since steadily declined. The number of existing homes for sale now stands a hair above its late-2013 trough and roughly where it stood in 2000/2001, despite a housing stock that is about 16 percent larger with about 18 million more homes than at that time.

The median seasonally adjusted price of existing homes sold in February fell 2.2 percent to $225,700, the largest month-over-month percent drop since May 2010. Over the year, the median price is up 4.2 percent, the slowest pace of annual growth since mid-2014.

However, there was a notable divergence in price trends between the West and the rest. The median price of existing homes sold fell 1.4 percent in the Northeast and 1.1 percent in the Midwest and the South in February from January, but increased 0.7 percent in the West over the same time. Over the year, the median price of existing homes sold is now down 0.7 percent, to $253,100, in the Northeast; up 5 percent in the South, to $199,500; up 6.2 percent, to $180,900, in the Midwest; and up 7 percent, to $331,700, in the West.