From the WSJ:
Sales of previously owned homes sank in February, a sign that demand for housing could be cooling amid rising prices and low inventory.
Sales fell 7.1% in February from the prior month to a seasonally adjusted annual rate of 5.08 million, the National Association of Realtors said Monday. Economists surveyed by The Wall Street Journal had expected sales would fall 2.6% to a rate of 5.33 million in February.
While inventory ticked up slightly in February to 4.4 months’ supply from January’s 4.0, economist Joel Naroff of Naroff Economic Advisors, Inc., noted a more “normal, vibrant market” would have roughly six months’ supply.
“Without the product to sell, it is hard to sell homes and that is a factor to consider when determining the meaning of this report,” Mr. Naroff said in a note to clients.
Economists cited other factors that may have given buyers pause, such as January’s blizzard on the East Coast and a slump in the stock market.
“The biggest drop in single-family home sales was the 17% plunge in the northeast, the region most sensitive to the stock market,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “If we’re right, the rebound in the market over the past month ought to mean home sales rebound in the spring, but momentum has stalled for now.”
Real-estate brokerage Redfin noted that the number of listings surged 12% in its major metro areas in February, signaling a stronger spring selling season on the horizon.
Lawrence Yun, the association’s chief economist, called February’s numbers a “meaningful slowdown,” but said the 5.25 million average for January and February was comparable to the same period a year ago.
Despite the fall, February’s sales are still 2.2% higher than February a year ago.