UPDATED -- Rising prices and severe winter weather caused existing-home sales to slip in February to its lowest level since July 2012 while the outlook for the overall American economy is improving.
Total existing-home declined 0.4% to a seasonally adjusted annual rate of 4.6 million in February from 4.62 million in January, and 7.1% below the 4.95 million-unit level in February 2013, according to the National Association of Realtors.
Lawrence Yun, NAR chief economist, said conditions in February were largely unchanged from January. “We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago,” he said. “Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”
Going forward it will take sustainable job and income growth to propel would-be-homebuyers back into the market, according to Lindsey Piegza, chief economist at the investment fire Sterne Agee. “With the labor market uneven at best, it may take some time before the housing industry regains the momentum seen earlier last year.”
The median existing-home price for all housing types in February was $189,000, which is 9.1% above February 2013.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage declined to 4.30% in February from 4.43% in January. The rate was 3.53% in February 2013.
Regionally, existing-home sales during February in the Northeast fell 11.3%, while sales in the Midwest declined 3.8%. In the South, existing-home sales rose 1.5% and sales in the West rose 5.9%.
Meanwhile, a separate report issued Wednesday shows the near-term outlook for the U.S. economy is brighter.
The Conference Board’s Leading Economic Index increased 0.5% in February to 99.8, following a 0.1% increase in January and a 0.1% decline in December.
“The U.S. LEI increased sharply in February, suggesting that any weather-related volatility will be short lived and the economy should continue to improve into the second half of the year,” said Ataman Ozyildirim, economist at The Conference Board. “The strengths and weaknesses in the LEI were balanced in February, with large increases in housing permits and the interest rate spread more than offsetting decreases in the workweek in manufacturing, consumer expectations and rising initial claims for unemployment insurance.”
The LEI is made up of 10 different components summarizing economic data and is used to forecast where the U.S. economy is headed in the next three to six months.
Update adds Leading Economic Indicators.