AP Radio AP Radio News:

Mar 22, 10:57 AM EDT

US home sales slowed in February after surge in January


AP Photo
AP Photo/Keith Srakocic

Interactives
Fireplaces
Painting Tips
Kid's Room Decor
How to Stage Your Home
Designing for Small Spaces
Tree Houses
Green Remodeling
Universal Design
Home Theater Basics
Home security products
Basement Renovations
How to Prep a Guest Room
Preparing your garden for winter
Go inside the smart home
Existing home sales interactive
Garage makeovers add value to homes
Keys to know when buying a condo
Real estate appraisal complaints
Trends in home offices
Baby-proofing your home
Latest bathroom trends
Latest trends in pools

WASHINGTON (AP) -- Americans retreated from buying existing homes in February, a pullback after sales in January had surged to the fastest pace in a decade. But over the past 12 months, sales are up solidly.

Sales of existing homes fell 3.7 percent last month to a seasonally adjusted annual rate of 5.48 million, the National Association of Realtors said Wednesday. The decline may represent just a temporary slump after the sharp sales increase in January.

Stable hiring and a recovering economy have fueled greater demand among homebuyers. Over the past year, purchases have risen 5.4 percent. At the same time, sales growth has been restricted by a shortage of homes on the market.

"The underlying story is still very positive for the housing market," said Jennifer Lee, a senior economist at BMO Capital Markets. "The February drop is just a blip in the overall trend."

The limited inventory and risks of rising mortgage rates may actually cause the spring home-buying season to begin with a sprint this month. Unlike last year when average 30-year mortgage rates held below 4 percent, buyers may this year feel forced to act swiftly before even higher loan rates and prices make home ownership less affordable.

The number of listings for sale has tumbled 6.4 percent over the past year to 1.75 million homes, a figure only slightly higher than in January when listings declined to the lowest level since the Realtors began tracking the data in 1999.

The supply of homes for sale has fallen on an annual basis for the past 21 months. With inventories squeezed, home values have been rising at levels that are putting greater financial pressure on would-be buyers.

The median sales price has risen 7.7 percent from a year ago to $228,400, more than double the pace of average wage gains.

Lower mortgage rates had eased some of that pressure last year. But the average 30-year fixed rate mortgage carried an interest rate of 4.3 percent last week, up from an average of 3.65 percent last year, according to mortgage buyer Freddie Mac.

In February, sales of existing homes slumped in the Northeast, Midwest and West, while the South eked out a slight gain.

© 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.



Latest News