The National Association of REALTORS® released its monthly Existing Home Sales report on March 21 and gave investors and home sellers something to cheer about.
While February sales of existing homes didn’t meet investor forecasts of 5.00 million homes sold on a seasonally adjusted annual basis, the actual number of existing (previously owned) homes came close at 4.98 million homes sold.
This number surpassed January’s revised reading of 4.94 million homes sold by 0.8 percent.
Sales of existing homes comprise approximately 85 to 90 percent of homes sold in the U.S.
Investors watch existing home sales for evaluating housing markets and short-term economic trends related to home purchases such as goods and services associated with home ownership.
Existing Home Sales Up For 20 Consecutive Months
Existing home sales have increased by 10.2 percent as compared to 4.52 million existing home sales for February 2012, and have increased for 20 consecutive months.
A short supply of homes available for sale and better job prospects are creating more demand for homes.
In February, available homes increased to a 4.7 month supply of homes, which is up from January’s 4.3 month supply of available homes, the lowest number since May of 2005.
With that said, current listed inventory of homes is 19.2 percent below last year’s 6.4 month supply of available homes.
Increasing demand for existing homes also suggests growing competition between buyers for available homes.
Mortgage Rates Remain Near Historic Lows Increasing Affordability For Home Buyers
Getting pre-approved for a mortgage before making an offer on a home can help buyers, as sellers know that pre-approved buyers won’t have potential delays related to the mortgage approval process.
The National Association of REALTORS® reports that the national median selling price for existing homes of all types was $173,600, which is up 11.6 percent year-over-year.
This suggests that potential homebuyers may want to act now as mortgage rates typically increase along with home prices.
Regional Average Selling Prices Show Positive Results For February
- Northeast: The median selling price was $238,800, 7.6 percent higher than for February 2012.
- Midwest: The median selling price was $129,900, which is 7.7 percent above the median selling price in February 2012.
- South: The median selling price was $150,500. This represents a 9.3 percent increase since February 2012.
- West: The median selling price was $237,700, a substantial increase of 22.7 percent over February 2012.
Multiple buyer bidding and limited inventory choices are fueling higher prices for existing homes, particularly in the West.
This is the strongest year-to-year rate of growth since November 2005, when existing home prices had increased by 12.9 percent as compared to the previous 12 months.