US existing home sales slump in February
Updated : 14:24
Sales of US existing homes fell much more than expected in February, according to data from the National Association of Realtors.
Sales were down 3.7% to a seasonally-adjusted annual rate of 5.48m from 5.69m in January. Analysts had been expecting a more modest decline of 2%.
Despite last month's decline, February's sales pace was still 5.4% above a year ago.
Meanwhile, the median price for an existing home was $228,400, up 7.7% from February 2016 and marking the fastest price increase since last January. It also marked the 60th consecutive month of year-over-year gains.
Total housing inventory at the end of last month was up 4.2% to 1.75m existing homes available for sale, but was still 6.4% below the previous year and has fallen for 21 straight months.
Lawrence Yun, NAR chief economist, said closings retreated in February as too few properties for sale and weakening affordability conditions stifled buyers in most of the country.
"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.
"Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market."
Pantheon Macroeconomics said: "This could easily have been much worse, given the weakness of the pending sales index, which are consistent with sales at just 5.15m or so. It's not clear why closed sales have run so far ahead of pending sales for the past few months, but this report does narrow the gap somewhat.
"Inventory remains very tight, at just 3.8 months for single family homes, and the trend is still falling slowly. Inventory is low enough to signal median price gains of 10%% plus, though the current trend is nearer 6%. Even at this pace, implied real mortgage rates for potential home buyers are well below zero. With lending standards easing substantially in recent months, we think spring home sales will rise."