Activity hits highest pace for a year
Existing-home sales across the US surged unexpectedly in February, hitting their fastest pace since the same time last year in a further sign that buyers and sellers alike are adjusting to the current interest rate reality.
New National Association of Realtors (NAR) data released on Thursday showed the annualized rate of contract closings reached 4.38 million, up 9.5% over January, a pace that far exceeded expectations and suggested the housing market is continuing to thaw rapidly.
Economists surveyed by Reuters had expected home resales to dip in February to a rate of 3.94 million units.
The NAR’s chief economist Larence Yun said an influx of new housing inventory was helping sate buyer demand, with supply jumping by 5.9% to 1.07 million units on a monthly basis – a 10.3% annual increase.
“Housing demand has been on a steady rise due to population and job growth,” Yun said, “though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”
Existing-home sales climbed 9.5% in February. Among the four major U.S. regions, sales jumped in the West, South and Midwest, and were unchanged in the Northeast. https://t.co/39QRqVyWlJ
— National Association of REALTORS® (@nardotrealtor) March 21, 2024
Housing supply should continue improving, Yun said – and home prices are also on the up, with the median selling price jumping by 5.7% over the same time last year (to $384,500). Multiple offers, meanwhile, are returning as a prominent theme of the current market, with 20% of homes changing hands above list price.
Expectations have hardened around the prospect of lower mortgage rates later in the year, with the Federal Reserve expected to begin cutting its benchmark rate at some point in the middle of 2024.
Yesterday, the central bank said it was holding that rate steady for the fifth time in a row, although chair Jerome Powell strongly indicated it expected inflation to ease in the coming months.
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