NAR: Existing-Home Sales Soften in Feb. to Lowest Level Since 2012

by Peter Thomas Ricci

March 25, 2014

Existing-home sales continue to level out in February, according to the latest analysis by NAR.

Existing-home sales continue to soften in February, falling 0.4 percent from January to February and 7.1 percent from Feb. 2013, according to the latest report from the National Association of Realtors (NAR).

Those declines brought existing-home sales down to a rate of 4.60 million, which is the lowest pace of sales since July 2012.

Existing-Home Sales in February

Other details in NAR’s report included:

Median price continued to increase in February, rising 9.1 year-over-year to $189,000.
Total housing inventory rose by both monthly (6.4 percent) and yearly (5.3 percent) measures.
Distressed homes continued to have a smaller presence in the market, falling from 25 percent of sales last year to 16 percent in February.
Median time on market was 62 days, down from 67 days in January and 74 days in Feb. 2013.
First-time homebuyers accounted for just 28 percent of purchases, up from 26 percent in January but down from 30 percent a year ago (and still far below historic averages).
All-cash sales remained consistent at 35 percent of transactions; that’s up from 33 percent last month and 32 percent last year.

What’s Ailing Housing?

So, what’s behind housing’s slowdown? Lawrence Yun, NAR’s chief economist, referenced some of the more familiar topics in NAR’s literature, including constrained inventory, restrictive mortgage lending standards and dwindling housing affordability.

NAR President Steve Brown, though, was more on the money with his comments, particularly on the plight facing first-time homebuyers.

“The biggest problems for first-time buyers are tight credit and limited inventory in the lower price ranges,” he said. “Twenty percent of buyers under the age of 33, the prime group of first-time buyers, delayed their purchase because of outstanding debt. In our recent consumer survey, 56 percent of younger buyers who took longer to save for a downpayment identified student debt as the biggest obstacle … It’s clear there are other people who would like to buy a home that are not in the market because of debt issues, so we can expect a lingering impact of delayed homebuying.”