WASHINGTON - Existing home sales fell 0.6% in February to a 5.02 million annual rate as inventories continued to rise, the National Association of Realtors reported today.
Sales have declined for three consecutive months following a surge in October and November as buyers rushed to secure the homebuyer tax credit. The market needs a “second surge” of existing home sales in April, May and June to offset rising inventories, said Lawrence Yun, the NAR’s chief economist.
The supply of existing home sales increased to 8.6 months from 7.8 months in January. This was an “unusually high” increase in inventories for the January to February period, Yun said.
If the months supply gets to double digits, then that “assures us we will get [existing home] price declines,” Yun said.
Sales in January declined 7.2% to 5.05 million sales at an annual rate, unrevised from last month.
Economists expected 5.0 million existing home sales in February, according to the median estimate from Thomson Reuters.
The median home price decreased to $165,100 in February, down 1.8% from February 2009, and increased 0.1% from January.
Homebuyers looking to cash in on the tax credit need to close by June 30. The sales surged in October and November occurred as the initial deadline neared – before federal legislation extended it to June, Yun said.
New home sales for February will be released by the Commerce Department Wednesday.
