Amid rising prices and slim inventory, sales of existing homes slowed in February, cooling from January’s record pace which saw the biggest jump in 10 years, an industry group reported Wednesday.
Despite the decline, sales last month remained well above their level at the same point in 2016.
Completed sales of single-family houses, townhomes and apartments fell 3.7 percent to an annual rate of 5.48 million, seasonally adjusted, according to the National Association of Realtors. Analysts were expecting a drop of only 2.6 percent to 5.54 million.
Compared to February 2016, however, sales were still 5.4 percent higher, as rising job creation and wages and pent-up demand from the post-crisis era allowed more people to buy homes or trade up to a bigger house.
Lawrence Yun, NAR chief economist, blamed the tight market for the weaker sales, saying many would-be homebuyers too often were left unable to seal the deal.
“Realtors are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” Yun said in a statement.
“Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market.”
The median home price rose a solid 7.7 percent over the same month of 2016 to $228,400, the fastest increase recorded since January 2016, according to NAR figures.
Total inventory jumped 4.2 percent to 1.75 million homes but was still 6.4 percent below the same point last year and has fallen for 21 consecutive months, year-on-year.
Industry analysts said supply and demand have trended in opposite directions in recent years, with the pace of new home construction still well below historic averages.
Analysts point to a shift by homebuilders to focus on multi-unit buildings to serve the hot rental market — as many people preferred to rent or were unable to buy in the wake of the crisis.
They also cite the high cost of construction and the large share of single-family homes held by investment firms as reasons for tight inventory.
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