February Existing Home Sales: One Last Show of Strength

• Existing home sales rose 6.5% from January and 7.2% from the same month in 2019, to 5.77 million (SAAR), according to the National Association of Realtors.
• The median existing-home price for all housing types in February was $270,100, up 8.0% from February 2019.
• Inventory was up 5% from January, but down 9.8% from February 2019.

The last report on existing home sales before the coronavirus outbreak spread in earnest in the U.S. provided another indication of the housing market’s general strength in the immediate pre-crisis period. Despite record-low inventory levels, buyers remained motivated by low mortgage rates, relatively mild winter weather and a still-humming job market to snap up what few homes were listed. Existing home sales recorded their strongest release since February 2007 -- coincidentally, just before the last major economic drop-off -- suggesting incredibly strong demand as the new year began and coronavirus curiosity hadn’t yet turned to fear. But it’s also important to remember that February’s data more accurately represent buying behavior in January, since they are measured at the time of closing, rather than the time of an agreed-upon offer. Because of this, next month’s release of March data – a month in which fear has firmly taken hold -- has a chance to slightly surprise to the upside, despite rapidly deteriorating market conditions. In any case, data in coming months won’t be pretty and the nice run-up in sales we’ve been enjoying over the past year has been indefinitely paused until this crisis ends.