ARLINGTON, Va.—Existing-home sales rebounded in February, increasing 3%, after falling for two straight months.
However, NAFCU Research Assistant Yun Cohen said in a NAFCU Macro Data Flash report that rising mortgage rates and lack of inventory could restrict future growth.
"Despite the improvement, the lack of inventory continues to constrain sales and put upward pressure on prices," Cohen said. "Rising mortgage rates, which hit their highest level since 2014 in early March, pose additional headwinds for the market. Demand for housing, on the other side, remains robust thanks to a healthy economy and strong labor market."
Existing-home sales rose to a seasonally adjusted annual rate of 5.54 million in February and were up 1.1% over the previous year. Sales increased in two of the four regions in February: sales in the West increased 11.4% and in the South 6.6%, while sales fell in the Northeast (-12.3%) and Midwest (-2.4%), Cohen said.
Based on current sales, there were 3.4 months of supply at the end of February, unchanged from January. Analysts consider six months of supply to be roughly balanced between supply and demand. Although inventory rose 4.6% in February, it was still 8.1% lower than a year ago, Cohen noted.
The median existing-home price increased from $240,800 in January to $241,700 (not seasonally adjusted) in February. This is 5.9% higher than the median price from a year ago, Cohen said.