Lower mortgage rates boost US sales realty estates in February

U.S. existing home sales rebounded more than expected in February as lower mortgage rates and the first year-on-year decrease in prices in 11 years pulled buyers back into the market, further evidence that the housing market was stabilizing at low levels.

Existing home sales, which are counted at the close of a contract, surged 14.5% to a seasonally adjusted annual rate of 4.58 million units last month. February's sales likely reflected contracts signed a couple of months back. Mortgage rates decreased from mid-November through early February before rising again. Home sales could fall in March.

Last month, sales increased in all four regions, with the Midwest, West and the densely populated South posting double-digit growth. The bulk of sales were concentrated in the $250,000-$500,000 price bracket.

Economists polled by Reuters had forecast home sales would rebound 5.0% to a rate of 4.20 million units. Home resales, which account for a big chunk of U.S. housing sales, fell 22.6% on a year-on-year basis in February.

SUPPLY STILL TIGHT

There were 980,000 previously owned homes on the market last month, unchanged from January and an increase of 15.3% from a year ago. At February's sales pace, it would take 2.6 months to exhaust the current inventory of existing homes, up from 1.7 months a year ago. A four-to-seven-month supply is viewed as a healthy balance between supply and demand.

https://www.reuters.com/markets/us/us-existing-home-sales-rebound-year-over-year-house-prices-fall-2023-03-21/