• Existing home sales increased 1.2 percent in February to 4.88 million units (SAAR), according to the National Association of Realtors.
• Strong sales in the West and South outweighed weak sales in the Northeast, which were likely held down by poor weather in January and February.
• The median price of existing homes sold jumped 7.4 percent year-over-year, to $218,450 (seasonally adjusted), the largest monthly change in almost three years.

Existing home sales increased by 1.2 percent in February to 4.88 million units at a seasonally adjusted annual rate (SAAR), according to the National Association of Realtors (NAR). The increase was almost exactly in line with our forecast (figure 1).

Cold weather in January and February in the Northeast held down sales in that region. Sales fell 6.5 percent in the Northeast from January to February, but increased 5.7 percent in the West. Sales in the South were up a modest 1.9 percent and were flat in the Midwest. All four regions have experienced year-over-year growth in sales for two consecutive months. Year-over-year sales of existing homes in the South have grown 5 percent or more for four consecutive months.

The median price of existing homes sold in February increased 2.7 percent from January, to $218,450 (seasonally adjusted), the largest monthly increase since April 2012. Some of this increase can be attributed to the shifting regional composition of sales. The slowly appreciating Northeast (where the median price was up 0.1 percent from January) was underweighted in this month’s sales data, and the rapidly appreciating South and West (where median prices were up 2.8 percent and 2.3 percent from January, respectively) overweighted in this month’s data.

Finally, the gap in prices between the West and the rest continues to grow: At the trough of the bust, the median price of existing homes sold in the West was about 20 percent above the national median price. It is now more than 40 percent higher.