| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Annual Rate | 3.920M | 3.850M to 3.950M | 4.38M | 4.00M |
| Month over Month | 9.5% | 3.1% | ||
| Year over Year | 3.3% | -1.7% |
Highlights
Sales of existing homes rose 9.5 percent in February to 4.38 million units at a seasonally adjusted annual rate after an unrevised 4.00 million units in January. The February sales pace is above the consensus of 3.92 million units in the Econoday survey of forecasters.
Sales of single-family homes rose 10.3 percent in February to 3.970 million units, but were down 2.7 percent from a year ago. Sales of condos and co-ops rose 2.5 percent in February to 410,000, but were down 8.9 percent compared to a year earlier. The report cited"life-changing" events that are probably driving the current sales pace as consumers can"no longer delay" the decision to put a home up for sale or to buy one.
"Additional housing supply is helping to satisfy market demand." The report continued,"Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices."
The report noted that consumers may be accepting the"new normal" of higher mortgage rates and that 3 percent mortgage rates are a thing of the past. The average Freddie Mac rate for a 30-year fixed rate mortgage is 6.74 percent for March to-date.
The supply of homes available for sale dipped to 2.9 months' worth in February after 3.0 months in January, but above the severe lows of 2.6 months in February 2023. However, the number of homes available for sale rose 5.9 percent to 1.070 million. The median home price increased 1.6 percent to $384,500 in February from $378,600 in January and up 5.7 percent from $363,600 a year ago.
Sales of single-family homes rose 10.3 percent in February to 3.970 million units, but were down 2.7 percent from a year ago. Sales of condos and co-ops rose 2.5 percent in February to 410,000, but were down 8.9 percent compared to a year earlier. The report cited"life-changing" events that are probably driving the current sales pace as consumers can"no longer delay" the decision to put a home up for sale or to buy one.
"Additional housing supply is helping to satisfy market demand." The report continued,"Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices."
The report noted that consumers may be accepting the"new normal" of higher mortgage rates and that 3 percent mortgage rates are a thing of the past. The average Freddie Mac rate for a 30-year fixed rate mortgage is 6.74 percent for March to-date.
The supply of homes available for sale dipped to 2.9 months' worth in February after 3.0 months in January, but above the severe lows of 2.6 months in February 2023. However, the number of homes available for sale rose 5.9 percent to 1.070 million. The median home price increased 1.6 percent to $384,500 in February from $378,600 in January and up 5.7 percent from $363,600 a year ago.
Market Consensus Before Announcement
After January's 3.1 percent monthly climb to a 4.00 million annual rate, existing home sales in February are expected to fall back to a 3.920 million rate.
Definition
Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.
Description
This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.
Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.
Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.
Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
