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According to the National Association of Realtors, existing home sales unexpectedly surged in February, marking the highest monthly increase on record.
Total existing home sales, which include previously owned single-family homes, townhomes, condos and co-ops, rose 9.5% from January to a seasonally adjusted annual rate of 4.38 million in February. However, sales are still down 3.3% compared to last year, when they hit 4.53 million units in February 2023, according to a NAR report released Thursday.
“Additional housing supply is helping meet market demand,” said NAR Chief Economist Lawrence Yun. “Demand for housing is steadily increasing due to population and employment growth, but the actual timing of purchase will be determined by prevailing mortgage rates and a wide range of inventory options.”
“For Sale” sign in Austin, Texas on March 19, 2024. Since President Biden took office in January 2021, home prices have increased by 25%. (Brandon Bell/Getty Images)
Americans may want to buy a home, but a lack of supply, rising prices and high mortgage rates are putting homeownership out of reach for many. Housing inventory in 2022 fell to its lowest level since the Federal Reserve began tracking the data in 2016, while housing costs reached record highs.
Americans are leaving big cities in droves, according to Census Bureau data.
Data table showing existing home sales, prices, mortgage rates, and mortgage payments for January and February from 2019 to 2024. (Fox News/Fox News)
Since President Biden took office in January 2021, home prices and related costs have followed the same inflationary trend as other economies.
Compared to three years ago, the median sales price for existing homes rose 25% from $307,400 in January 2021 to $384,500 in February 2024, according to NAR data.
Existing home sales were 6.6 million when President Biden took office, but have since fallen to 4.38 million, a 34% decline, according to Thursday’s report.
Not only are home prices rising and supply decreasing, but mortgage costs are also rising. As of February 2024, the monthly mortgage payment for an existing home was $2,001, according to NAR. This represents a massive 98% increase compared to the January 2021 reading of $1,009.
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Existing home sales decreased by 33.6% from 6.6 million units in January 2021 to 4.38 million units in February 2024. (Fox News)
Mortgage interest rates, which averaged 2.79% in January 2021, are now 6.78%.
Rents are also higher for people who can’t afford or don’t want to buy a home. The average monthly rent for a two-bedroom apartment in the United States in January 2021 was $1,132. The average monthly rent for an apartment of that size is now up 20% to $1,363, according to data from apartmentlist.com.
The median sales price for existing homes rose from $307,400 in January 2021 to $384,500 in February 2024. (Fox News/Fox News)
As long as there is strong demand and limited supply, housing costs are expected to continue rising.
“Home sales were down in February compared to a year ago because there weren’t enough homes on the market to meet demand,” said Holden Lewis, home and mortgage expert at NerdWallet.
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The average monthly mortgage payment for a $400,000 home with a 20% down payment increased from $1,349 in January 2021 to $2,129 in February 2024. (Fox News/Fox News)
Total housing inventory (the number of homes for sale) at the end of February was 1.07 million units, an increase of 5.9% from January and a 10.3% increase from 970,000 units a year ago, according to the NAR report. .
“At the end of February, there were only 1.07 million existing homes for sale. In the same month five years ago, before the pandemic, there were 1.63 million homes for sale. of homes sold,” Lewis said. “Demand exceeds supply, so buyers compete with each other and drive up prices.”
Regional sales increased in the West, South and Midwest, but were flat in the Northeast, according to the report. Sales decreased year on year in all regions.
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Home prices also rose in every major region of the United States, according to NAR. The median existing home price for all home types in February was $384,500, up 5.7% from February 2023, according to NAR.
“Due to inventory constraints, the Northeast performed the worst in the region for home sales in February, but the best for home prices,” Yun said. “More supply is clearly needed to stabilize housing prices and allow more Americans to move into their next home.”
