Existing-home sales in the U.S. increased modestly in February, but constrained inventory levels pushed price growth to its fastest pace in a year, according to the National Association of Realtors on Monday.
Total existing-home sales, which include single-family homes, townhomes, condominiums and co-ops, rose 1.2% to a seasonally adjusted annual rate of 4.88 million in February from 4.82 million in January. Sales are 4.7% higher than a year ago and above year-over-year totals for the fifth consecutive month.
The median existing-home price for all housing types in February was $202,600, 7.5% above February 2014.
Lawrence Yun, NAR chief economist, said although February sales showed modest improvement, there’s been some stagnation in the market in recent months.
“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” he said. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.”
According to the group, below-freezing winter weather likely had an impact on sales as more moderate activity was observed in the Northeast and Midwest compared to other regions of the country.
“With all indications pointing to a rate increase from the Federal Reserve this year, perhaps as early as this summer, affordability concerns could heighten as home prices and rents both continue to exceed wages,” said Yun.
A NAR study released earlier this month found that the disparity between rent and income growth is widening in metro areas throughout the country and is making it harder for renters to become homeowners.
Single-family home sales increased 1.4% to a seasonally adjusted annual rate of 4.34 million in February from 4.28 million in January, and are 5.9% above the 4.10 million pace a year ago. Existing condominium and co-op sales were at a seasonally adjusted annual rate of 540,000 units in February, unchanged from January, but 3.6% February 2014.
February existing-home sales in the Northeast dropped 6.5% but are still 3.6% above a year ago while in the Midwest, sales were unchanged in February from the month before but up 8.8% from the same time in 2014.
Existing-home sales in the South increased 1.9% and are now 6% above February 2014, while in the West it climbed 5.7% and 2.8% higher compared to a year ago.