The sale of existing homes in the U.S. economy surged last month, ending a year-long losing streak. Prices, however, are on the decline and first-time buyers are starting to sit on the sidelines. File photo by Alexis C. Glenn/UPI | License Photo
March 21 (UPI) -- Existing home sales in the U.S. economy surged in February, ending a 12-month decline, but while inventories remain tight, prices are starting to moderate, the National Association of Realtors said Tuesday.
Existing-home sales increased by 14.5% in February, the largest month-on-month percentage increase since July 2020, and ended a 12-month losing streak.
"Inventory levels are still at historic lows," NAR Chief Economist Lawrence Yun said. "Consequently, multiple offers are returning on a good number of properties."
While sales remain strong, prices are on the decline. NAR finds the average price for an existing home is around $363,000, a 0.2% decline relative to year-ago levels. That, according to the association, snaps a 131-month streak -- a streak that began more than a decade ago.
What's more, first time buyers were responsible for 27% of existing-home sales last month, down from 31% in January and 29% in February 2022. A November profile of the market from NAR found the share of first-time buyers year-on-year was 26%, the lowest level since the association started keeping records.
NAR's data marks something of a reversal from earlier trends. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index showed a 5.8% annual gain in home prices for December, though that was down from the 7.6% increase through the 12-month period ending in November.
S&P, however, said the prospects for a weakening U.S. economy and higher interest rates suggest the average price increase for a home is likely to continue to decline.
The U.S. Federal Reserve meets Thursday to consider its next steps in the fight against inflation. Retail prices are still elevated at around 6% year-on-year, but that's above the Fed's target rate of 2% for annual inflation.
The European Central Bank last week raised its lending rates by a half percent, despite concerns of a global crisis in the financial sector. What happens next at the Fed could influence borrowing rates for the U.S. consumer.
A 30-year, fixed-rate mortgage has a 6.6% interest rate, up from 4.16% at this time last year.