Existing home sales grew 3.0% to a seasonally adjusted 5.54 million-unit rate in February from an unrevised 5.38 million sales pace the previous month, the National Association of Realtors announced Wednesday.

The February rate is a 1.1% increase from the same month a year ago. The headline number was above the median 5.42 million unit pace predicted by economists polled by IFR Markets.

“A big jump in existing sales in the South and West last month helped the housing market recover from a two-month sales slump,” said NAR chief economist Lawrence Yun. “The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices — especially in the West — shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.”

Sales in the regions were mixed in January. They were down 12.3% in the Northeast and 2.4% in the Midwest, but up 6.6% in the South, and 11.4% in the West.

Inclement weather in the Northeast and Midwest this year held down sales, which are additionally threatened by recent snow in the regions, Yun said.

The median sales price was $241,700 in February, up from $240,800 in January, and up 5.9% from a year ago.

Inventory levels rebounded 4.6% from the previous month to 1.59 million existing homes, representing a 3.4-month supply at the current pace. Inventory was down 8.1% from the February 2017 level. This was the lowest February inventory since the series, which began in 1999.

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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.