Existing home sales for February rose 5.1% month-over-month (m/m) to 4.72 million units on an annual rate, well above the expectation of a fall of 0.9% to a rate of 4.45 million units, after falling 5.3% in January. Year-over-year sales declined 4.6%. According to the National Association of Realtors (NAR), entry level buyers are bargain shopping, and therefore distressed sales, such as foreclosures, accounted for 40 - 45% of transactions in February. The NAR noted that their analysis shows that distressed homes typically sell for 20% less than the normal market price, which is drawing down the overall median price. The average price for existing homes for sale was $165,400, falling 15.5% from a year ago, the second-biggest drop on record. Inventories rose to 3.8 million existing homes available for sale from 3.6 million in January, and the supply represents 9.7 months of sales, up from 9.6 months in December. The NAR said that sales gains in the West were led by California, where "the median listing price is beginning to rise for the first time in three years." Home shopping activity nationally picked up after the $8,000 first-time buyer tax credit was put in place.
[3/23, Schwab Alerts]