Existing home sales increased 1.2% in February, and the share of sales for first-time buyers registered its first gain since last November. The National Association of Realtors (NAR) reported February 2015 total existing home sales at a seasonally adjusted rate of 4.88 million units combined for single-family homes, townhomes, condominiums and co-ops, up from 4.82 million units in January. February existing sales were up 4.7% from the same period a year ago.
Reflecting the harsh winter weather, existing sales from the previous month were down 6.5% in the Northeast and unchanged in the Midwest. Existing sales in the West and South were up 5.7% and 1.9% respectively. Year-over-year, all four regions increased, ranging from 6.0% in the South to 2.8% in the West.
The first-time buyer share increased to 29% in February, up from 28% in January. First-time buyers comprised 28% of existing sales in February of 2014. Reports of easing mortgage standards will help first-time buyers, and a full recovery awaits their return to their typical 40% share.
Total housing inventory increased 1.6% in February to 1.89 million existing homes. At the current sales rate, the February represents a 4.6-month supply, unchanged from January. NAR also reported that in February the typical time on the market was 62 days, down from 69 days in January and unchanged from the same month a year ago. NAR reported that 34% of homes sold in February were on the market less than a month, compared to 30% of homes sold in January, 31% in December and 32% in November.
The distressed sales share in February remained unchanged at 11% for the third consecutive month, and was down from 16% during the same month a year ago. Distressed sales are defined as foreclosures and short sales sold at deep discounts. February all cash sales decreased to 26% of transactions from 27% in January, and were down from 35% in February 2014. Individual investors purchased a 14% share in February down from 17% in January and 21% in February 2014. Some 67% of February investors paid cash, unchanged from January and up from 63% in December and 61% in November. The awaited withdrawal of cash investors will create more opportunity for first-time buyers.
The February median sales price of $202,600 was 7.5% above the previous February, and represented the 36th consecutive month of year-over-year price increases. The median condominium/co-op price increased in February to $190,200, the first increase after six consecutive months of decreases, and was up 2.8% from February 2014.
The Pending Home Sales Index increased 1.7% in January, so the modest increase in February existing sales was consistent with that pattern, especially with the severe winter weather in the Northeast and Midwest. It is expected that existing sales will continue their upward momentum during 2015, hopefully supported by the much awaited recovery for first-time buyers.