UNITED STATES NEWS

February home sales fall amid higher mortgage rates, prices

Mar 18, 2022, 7:00 PM | Updated: Mar 20, 2022, 5:54 am

Sales of previously occupied U.S. homes fell in February as competition for a near-record low number of properties on the market drove prices higher and rising mortgage rates kept would-be buyers on the sidelines.

Existing home sales fell 7.2% last month from January to a seasonally adjusted annual rate of 6.02 million, the National Association of Realtors said Friday. That’s less than the roughly 6.1 million sales that economists had been expecting, according to FactSet.

Sales declined 2.4% from February 2021 as the median home price jumped 15% from last year at this time to $357,300.

Home prices are surging as potential buyers compete for relatively fewer homes available, even with a modest seasonal increase in properties on the market ahead of the spring homebuying season.

“As a buyer, it’s still a struggle to get into the market with the lack of inventory,” said Lawrence Yun, NAR’s chief economist.

The number of homes for sale at the end of February totaled just 870,000. That’s just 2.4% above the record low set in January on data going back to 1999. The inventory of unsold homes was down 15.5% from February 2021.

At the current sales pace, the low level of for-sale properties amounts to a 1.7 months’ supply, the NAR said.

On average, homes sold in 18 days of hitting the market last month. It was 19 days in January. In a market that’s more evenly balanced between buyers and sellers, homes typically remain on the market 45 days.

A quarter of all homes sold last month were purchased with cash, down from 27% in January, NAR said. A year ago they made up 22% of sales.

Real estate investors accounted for 19% of transactions in February, up from 17% a year ago. First-time buyers, meanwhile, made up only 29% of all homes sold last month.

“First-time buyers are struggling to try to get into the market,” Yun said.

Housing market demand looks to remain healthy this year, bolstered by ongoing demographic change as younger millennials and Gen-Zers come of age and look to become homeowners. But with housing in short supply since well before the pandemic and now higher interest rates, the limits of what house hunters can afford will be constrained, especially first-time buyers.

The average rate for the benchmark 30-year mortgage rose to 4.16% this week, moving above 4% for the first time since May 2019, according to mortgage buyer Freddie Mac. A year ago, the average rate stood at 3.09%.

That increase in the cost of financing a home is on top of the higher costs consumers are facing with inflation running at the highest level in decades.

Yun estimates that the rise in rates and escalating prices have pushed up the monthly payment on a home 28% from what it was a year ago.

Historically low mortgage rates last year helped give would-be homeowners buying power as prices soared. Home loan rates are expected to rise this year as the Federal Reserve moves to fight inflation. This week, the central bank increased its key short-term interest rate — which it had kept near zero since the early days of the pandemic recession — by a quarter point. The Fed also signaled potentially up to seven additional rate hikes this year.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

United States News

Associated Press

The House is on the brink of approving aid for Ukraine and Israel after months of struggle

WASHINGTON (AP) — The House is preparing in a rare Saturday session to approve $95 billion in foreign aid for Ukraine, Israel and other U.S. allies, Democrats and Republicans joining together behind the legislation after a grueling monthslong fight over renewed American support for repelling Russia’s invasion into Ukraine. Republican House Speaker Mike Johnson, putting […]

10 hours ago

Associated Press

The Senate passes a reauthorization of a key US surveillance program just after a midnight deadline

WASHINGTON (AP) — Barely missing its midnight deadline, the Senate voted early Saturday to reauthorize a key U.S. surveillance law after divisions over whether the FBI should be restricted from using the program to search for Americans’ data nearly forced the statute to lapse. The legislation approved 60-34 with bipartisan support would extend for two […]

10 hours ago

This satellite image from Planet Labs PBC shows Iran's nuclear site in Isfahan, Iran, April 4, 2024...

Associated Press

Israel, Iran play down apparent Israeli strike. The muted responses could calm tensions — for now

Israel and Iran are both playing down an apparent Israeli airstrike near a major air base and nuclear site in central Iran.

12 hours ago

Speaker of the House Mike Johnson, R-La., talks to reporters just after lawmakers pushed a $95 bill...

Associated Press

Ukraine, Israel aid advances in rare House vote as Democrats help Republicans push it forward

The House pushed ahead Friday on a foreign aid package of $95 billion for Ukraine, Israel, Taiwan and other sources of humanitarian support.

14 hours ago

Associated Press

Idaho group says it is exploring a ballot initiative for abortion rights and reproductive care

BOISE, Idaho (AP) — A new Idaho organization says it will ask voters to restore abortion access and other reproductive health care rights in the state after lawmakers let a second legislative session end without modifying strict abortion bans that have been blamed for a recent exodus of health care providers. “We have not been […]

16 hours ago

Associated Press

An Alabama prison warden is arrested on drug charges

ATHENS, Ala. (AP) — The warden of an Alabama prison was arrested Friday on drug charges, officials with the state prison system confirmed. Chadwick Crabtree, the warden at Limestone Correctional Facility, was charged with the manufacturing of a controlled substance, possession of marijuana, possession of a controlled substance, and possession of drug paraphernalia, according to […]

16 hours ago

Sponsored Articles

...

Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

(KTAR News Graphic)...

Boys & Girls Clubs

KTAR launches online holiday auction benefitting Boys & Girls Clubs of the Valley

KTAR is teaming up with The Boys & Girls Clubs of the Valley for a holiday auction benefitting thousands of Valley kids.

February home sales fall amid higher mortgage rates, prices