A MIXED BAG
Basic economics didn’t hold in February. Sales of existing homes were down a surprising 7.1% to 5.08 million units on an annualized basis. At the same time, the median price of an existing home dropped 1.4% to $210,000 for February, while supply, the lack of which has been an issue for the past two years, was up 3.3% to 1.88 million units.
So, for last month, we had more supply and lower prices, yet sales tanked.
As for new homes, we saw a different dynamic at play. Sales of new homes rose 2% to 512,000 units on an annualized basis. Sales were up, but so too were prices. The median price of a new home was up a strong 6.2% to $301,400 for February. Supply is also on the rise. There’s a 5.6 months’ worth of supply at the current sales pace. This is the highest sales-to-supply multiple since December 2008.
Other factors, like weather, played a part in the anomalous February sales data. Now that spring is here, we expect to see less variation in monthly sales numbers. We also still expect to see good things for sales and housing activity through 2016.