The NAR (National Association of Realtors) reported that sales of existing homes were little changed last month, up 0.4 percent from a downwardly revised annual rate of 490,000 units in December to 492,000 in February, as the inventory of homes for sale dropped to the lowest level since 2000.
The months of supply metric fell from 4.5 o 4.2, a fresh eight-year low, and inventory fell to just 1.74 million units, but a higher share of purchases at this time of the year by investors resulted in the median sales price falling from $180,800 to $173,600 last month, now up an impressive 12.3 percent from a year ago.
Sales of distressed homes accounted for 23 percent of last month’s home purchases (14 percent foreclosures and 9 percent short sales), down sharply from a 35 percent share last year at this time. All cash sales fell from a 29 percent share in December to 28 percent in January and investors were responsible for 19 percent of all sales, down from 21 percent the month before.
NAR Chief Economist Lawrence Yun declared the beginning of a “seller’s market” when noting “Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”