• February existing home sales fell 7.1 percent from January, to roughly 5.08 million units (SAAR).
• Excluding November, when sales volume dropped because of regulatory changes, February’s decline represents the biggest drop since last February.
• The median price of an existing home sold in February also tumbled, falling 2.2 percent from January to $225,700 (seasonally adjusted), the biggest month-month drop since May 2010.

Tight supply translated into weaker-than-expected February existing home sales as inventory continued to weigh on the market last month. In addition, wintry January weather contributed to lower pending home sales in January, which spilled over into fewer February closings. Weakness in existing home sales isn’t indicative of any particular weakness in the economy or even a fading desire among Americans to buy homes. The job market remains solid, wages have finally begun growing again and fundamentals are strong. This weakness in sales is increasingly driven by the fact that there are just so few homes available out there to buy, especially entry-level homes. For the time being, home shoppers will need to get used to this challenging environment. On the plus side, prices of existing homes fell month-over-month and grew at their slowest annual pace since June 2014, which should allow more buyers to catch their breath and remain competitive this spring shopping season.