Existing Home Sales Tumble As NAR Warns Prices Becoming Increasingly Unaffordable

After starting the year at the fastest pace in almost a decade, existing-home sales slid in February some 3.7%, below the 2.0% drop expected, as 5.48 million existing houses were sold last month which was marked by a paradoxe: on one hand, NAR reported that the median existing-home price in February was $228,400, up 7.7% from February 2016 and was the fastest increase since last January (8.1 percent). On the other hand, as the NAR itself admits, affordability has collapsed which together with too little inventory of homes for sale, meant that buyers and sellers were unable to meet in the middle, leading to the 3rd worst month in the past 6 years, the lowest since September 2016.

As Lawrence Yun, NAR chief economist, said, closings retreated in February as too few properties for sale and weakening affordability conditions stifled buyers in most of the country. "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," he said. "Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market."

Added Yun, "A growing share of homeowners in NAR's first quarter HOME survey said now is a good time to sell, but until an increase in listings actually occurs, home prices will continue to move hastily."

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