From the WSJ:
Sales of previously owned homes ticked up last month, but buyers are facing a dynamic of rising home prices and shrinking inventory that make homes less affordable.
Existing-home sales increased 1.2% last month from January to a seasonally adjusted annual rate of 4.88 million, the National Association of Realtors said Monday. Sales in February were up 4.7% from the same month a year earlier.
The median sale price for a previously owned home was up 7.5% from a year earlier to $202,600 in February.
Existing-home sales remain lackluster more than five years after the recession, and the latest price growth is at an “unhealthy” pace at this stage of the recovery, NAR chief economist Lawrence Yun said.
The price increase “is certainly good news for homeowners but it is negatively impacting affordability for people who want to buy a home,” Mr. Yun said Monday.
Existing home sales fell slightly in 2014, despite a modest uptick in the second half of the year as the labor market strengthened and mortgage rates remained at historic lows. Still, sales of existing homes, which account for roughly 90% of all purchases in the U.S., have yet to approach prerecession levels.
Meanwhile, fewer homes were available for sale in February compared with a year earlier, a factor Mr. Yun said may be driving up prices.
At the current sales pace, it would take 4.6 months to exhaust the supply of homes on the market. Total housing inventory at the end of February increased 1.6% from a month earlier, to 1.89 million existing homes available for sale. But the increase was small compared with the typical rise in inventory from January to February, which has averaged about 5.6% since 2000, Mr. Yun said.
“It’s all about inventory,” Mr. Yun said. “The only way to truly get that inventory is for the home builders to bring those new homes onto the market. “When that happens some of the existing homeowners buy those new homes and thereby release their existing homes on the market.”