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Existing Home Sales: Weather Hindered February Activity

March 22, 2021
Bottom Line: Sales slowed in February as unusually harsh winter weather hampered activity in the Northeast, Midwest, and South. Only the West saw higher sales.   Sales were also revised modestly lower for prior months.  Still, the last six months' level, averaging over 6.5 million annualized units, is historically very strong.  Inventories were unchanged in February, leaving the months' supply at just under 2 months, historically very tight.  In February, median prices were sharply higher, mostly due to higher-priced sales in the West.   Overall the trend remained strong.  Housing activity will remain an important driver of economic growth in the recovery as the underlying trends confirm a secular shift away from more dense, urban living towards single-family homes.  That said, the recent rise in rates is a concern and bears particular watching as the spring season approaches.
Existing Home Sales FELL by 6.6% in February to 6.22 million, compared with market expectations for a decline to 6.49 million. The prior month was revised down from 6.76 to 6.66 million.   Home re-sales are now 9.1% ABOVE their year ago level.
The Inventory of Homes Available for Sale
was UNCHANGED at 1,030k and are now 29.5% BELOW  their year-ago level. Because inventories were UNCHANGED while sales declined, the Months Supply ROSE to 2.0 months from 1.9 months.  This is still well BELOW the 6-month level that is considered 'normal'.
Home Prices
ROSE compared to their year-ago levels. Average home prices are 12.6% ABOVE their year-ago levels while median home prices are 15.8% ABOVE their year-ago levels.