February Existing Home Sales Key Takeaways: Sales Remain Strong Despite Seasonal Blips

• Existing home sales fell in line with Zillow’s expectations for February, declining 3.7 percent from January to 5.48 million units at a seasonally adjusted annual rate (SAAR).
• New listings of condos/coops drove a slight increase in the number of existing homes for sale.
• The median price of existing homes sold in January rose 1.1 percent to a new all-time high of $244,400.

Existing home sales fell in line with expectations in February, dropping 3.7 percent from January to 5.48 million units at a seasonally adjusted annual rate (SAAR), according to the National Association of Realtors (NAR) (figure 1). The drop erased much of the rebound reported in January, which followed December sales that were held down by wintry weather across much of the country. Still, sales are up 5.4 percent over the year – their strongest year-over-year gains since last April (November aside, when the year-over-year figure was inflated by artificially low sales in November 2015).

Regionally, February sales were most resilient in the South– rising 1.3 percent from January, with drops elsewhere, including a 7 percent decline in the Midwest and a 3.1 percent decline in the West. However, over the year, sales growth has been strongest in the West, where it’s up 9.65 percent from last February. In the South and Midwest, sales rose 5.9 percent and 2.6 percent respectively over the year.  Compared to pre-crisis peaks, the number of existing home sales is still down 25.6 percent in the West and 16.1 percent in the South.

The number of existing homes for sale rose 0.3 percent from January to 1.91 million units (SAAR), but it remains down 6.25 percent over the year. Moreover, inventory of single-family homes was flat, meaning all of the increase in inventory in February was driven by condos/coops.

The median seasonally-adjusted price of existing homes sold in February was $244,400, up 1.1 percent from January and up 7.6 percent from a year earlier. It was the strongest year-over-year increase in median sale price since May 2015 and is now 6 percent above its pre-crisis peak. That price was up 1.3 percent from pre-crisis peaks in the West, and up 11 percent in the South.