US existing home sales fall short of forecasts in February

Existing home sales in the US undershot economists' forecasts last month due to "major challenge" posed by falling home affordability.

According to the National Association of Realtors, in seasonally adjusted terms, the annual rate of existing home sales fell at a month-on-month pace of 7.2% to reach 6.02m.

Economists had forecast 6.20m.

"Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases," said Lawrence Yun, NAR's chief economist.

"Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate."

Nevertheless, Yun believed house price inflation would slow as demand cooled and supply improved "somewhat" thanks to new home construction.

Housing inventory rose by 2.4% on the month in February to reach 870,000, but was nevertheless down by 15.5% in comparison to the year-earlier level.

February's level of inventory was the equivalent to 1.7 months' supply at the current sales clip.

In year-on-year terms, existing home sales decreased by 2.4%.

Going the other way, existing house prices were ahead by 15.0% over the preceding 12 months on a median basis to reach $357,300.