Existing home sales fell by 3.7% to a seasonally adjusted annual rate of 5.48 million last month, compared with 5.69 million in January, according to new data from the National Association of Realtors. However, February sales were still 5.4% higher than sales over the same period in 2016.
NAR Chief Economist Lawrence Yun said low number of properties on sale and soft affordability conditions affected February closings.
"Realtors are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that's pushing up price growth and pressuring the budgets of prospective buyers," Yun said. "Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market."
Last month, the median existing home price was $228,400 – a year-over-year increase of 7.7%. This increase marks the 60th consecutive month of year-over-year price gains.
“The affordability constraints holding back renters from buying is a signal to many investors that rental demand will remain solid for the foreseeable future," Yun said. "Investors are still making up an above-average share of the market right now despite steadily rising home prices and few distressed properties on the market, and their financial wherewithal to pay in cash gives them a leg up on the competition against first-time buyers."
Morning Briefing: Existing home sales ease but remain above last year
February home prices up by 7.2% – Redfin