Sales of previously owned homes rose 14.5% in February compared with January, according to a seasonally adjusted count by the National Association of Realtors. That put sales at an annualized rate of 4.58 million units.
It was the first monthly gain in 12 months and the largest increase since July 2020, just after the start of the Covid-19 pandemic. Sales were, however, 22.6% lower than they were in February of last year.
These sales counts are based on closings, so the contracts were likely signed at the end of December and throughout January, when mortgage rates had fallen sharply. The average rate on the popular 30-year fixed loan hovered in the low 6% range throughout January after reaching a high of 7% last fall.
The relative drop caused a jump in sales of newly built homes, before rates jumped back toward 7% in February. They now stand at 6.67%, according to Mortgage News Daily.
“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said Lawrence Yun, chief economist for the Realtors, in a release. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”
Higher mortgage rates have been cooling home prices since last summer, and for the first time in a record 131 consecutive months – nearly 11 years – prices were lower on a year-over-year comparison. The median price of an existing home sold in February was $363,000, a 0.2% decline from February 2022. Read more…