Sliding US Home Sales Point to Subdued Housing Recovery
The sale of previously-owned US homes fell to a 19-month low, as severe weather and rising prices continued to weigh on the housing recovery.
Existing US home sales slid 0.4 percent to 4.6 million in February, following a decline of 5.1 percent, the National Association of Realtors reported today. Home sales, which had risen 0.8 percent in December, have been hampered by severe weather for the past two months. Existing home sales fell at the fastest pace in 18 months in January, NAHB data showed.
Market conditions were largely unchanged in February, according to NAHB chief economist Lawrence Yun.
“We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago,” Yun said in a press release. “Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”
Yun’s comments offer hope the housing recovery is still on track after a prolonged, weather-induced slowdown. However, rising mortgage rates and a lack of supply weighed on the housing recovery long before the weather became an issue. Signs of a slowing housing market first emerged last summer, after rising mortgage rates impacted sales more than expected.
Recent data on building permits suggest the housing sector could pick-up this spring. Authorizations rose 7.7 percent to a seasonally-adjusted annual pace of 1.01 million in February. However, permits to build single-family homes, which represent the largest segment of the market, declined 1.8 percent.
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