WASHINGTON -- Americans retreated from buying previously owned homes in February, a pullback after sales in January had surged to the fastest pace in a decade. But over the past 12 months, sales are up solidly.
Sales of previously owned homes fell 3.7 percent last month to a seasonally adjusted annual rate of 5.48 million, the National Association of Realtors said Wednesday. The decline may represent a temporary slump after the sharp sales increase in January.
Stable hiring and a recovering economy have fueled greater demand among homebuyers. Over the past year, purchases have risen 5.4 percent. At the same time, sales growth has been restricted by a shortage of houses on the market.
"The speed of transactions is very fast, and we know that there's an inventory shortage," Lawrence Yun, the National Association of Realtors' chief economist, said at a news conference as the figures were released. "Buying interest remains very solid and strong, but we have a bottleneck. We don't have enough inventory to satisfy that buying interest."
The limited inventory and risks of rising mortgage rates might actually cause an early spike in spring sales this month. Unlike last year, when average 30-year mortgage rates held below 4 percent, buyers this year might feel forced to act swiftly before higher loan rates and prices make homeownership less affordable.
The number of listings for sale has tumbled 6.4 percent over the past year to 1.75 million homes, a figure only slightly higher than in January, when listings declined to the lowest level since the Realtors began tracking the data in 1999.
The supply of homes for sale has fallen on an annual basis for the past 21 months. With inventories squeezed, home values have been rising at levels that are putting greater financial pressure on would-be buyers.
The median sales price has risen 7.7 percent from a year ago to $228,400, more than double the pace of average wage gains.
Lower mortgage rates had eased some of that pressure last year. But the average 30-year, fixed-rate mortgage carried an interest rate of 4.3 percent last week, up from an average of 3.65 percent last year, according to mortgage buyer Freddie Mac, the Federal Home Loan Mortgage Corp.
In February, sales of previously owned homes slumped in the Northeast, Midwest and West, while the South eked out a slight gain.
Information for this article was contributed by Patricia Laya of Bloomberg News.
Business on 03/23/2017