US home sales bounce in February, ending 12-month slide

US home sales bounce in February, ending 12-month slide

Sales of existing homes in the United States jumped 14.5 percent in February from January
Sales of existing homes in the United States jumped 14.5 percent in February from January. Photo: JIM WATSON / AFP/File
Source: AFP

PAY ATTENTION: Celebrate South African innovators, leaders and trailblazers with us! Click to check out Women of Wonder 2022 by Briefly News!

Sales of existing homes in the United States made their biggest monthly jump since 2020 in February, ending a year of declines according to industry data released on Tuesday.

As the US central bank raised interest rates steeply over the past year to curb surging inflation, the rate-sensitive housing market has been reeling.

But last month, existing home sales rose 14.5 percent from January to a seasonally adjusted annual rate of 4.58 million, said the National Association of Realtors (NAR) in a statement.

Compared with a year ago however, sales were still down by 22.6 percent, the NAR said.

"Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines," added NAR chief economist Lawrence Yun in a statement.

He added that sales are stronger in areas where home prices are falling and local economies are adding jobs.

Read also

Deliveroo reduces losses on cost-cutting

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ click on “Recommended for you” and enjoy!

According to home loan finance company Freddie Mac, the popular 30-year fixed-rate mortgage averaged 6.6 percent as of March 16, down from the week before.

Existing home sales make up the vast majority of the US property market.

Costs are a constraint

"Mortgage rates remain high although they have come off recent peaks," said High Frequency Economics chief US economist Rubeela Farooqi in a note.

"But affordability remains a key constraint for buyers," she said.

Kieran Clancy, senior US economist at Pantheon Macroeconomics, added: "A dramatic improvement in affordability is still needed before sales can recover."

The median home price across housing types was down slightly from a year ago at $363,000, said the NAR.

But Yun added that "inventory levels are still at historic lows."

Read also

US retail sales and producer prices fall, easing Fed pressure

Month-over-month sales picked up in all four major US regions.

As of end-February, total housing inventory was 980,000 units, identical to January and up from a year ago, said the association.

"Unsold inventory sits at a 2.6-month supply at the current sales pace," the NAR noted.

Nancy Vanden Houten, lead US economist at Oxford Economics, cautioned: "We expect home sales to come under renewed pressure in the months ahead, with a recession in the second half of the year also weighing on home sales."

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ click on “Recommended for you” and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.