US Existing Home Sales Fall 3.7% From January High
$DIA, $SPY, $QQQ, $VXX
US home resales fell more than expected in February on a persistent shortage of houses on the market that is pushing up prices and sidelining prospective buyers.
The National Association of Realtors (NAR) said Wednesday existing home sales declined 3.7% to a seasonally adjusted annual rate of 5.48-M units last month after hitting a 10-year high in January.
Sales were up 5.4% from February 2016, underscoring the sustainability of the housing market recovery despite the supply constraints.
The median house price rose 7.7% from a year ago to $228,400 in February. That marked the 60th month running of Y-Y price gains (5 years)
Economists had forecast sales decreasing 2.0% last month.
In February, houses typically stayed on the market for 45 days, down from 59 days a year ago. Despite February’s sales drop, the housing market was on track to contribute to economic growth in Q-1 through increases in homebuilding and broker commissions.
The PHLX Housing Index fell 0.5%.
Economists said there were few signs sales had been significantly affected by rising mortgage rates. Although annual wage growth has stubbornly remained below 3 percent, economists expect an acceleration as the job market, which is near full employment, tightens further.
The 30-year fixed mortgage rate is hanging at 4.30%.
Housing inventory has dropped for 21 straight months on a Y-Y basis. Builders have been unable to fill the inventory gap, citing rising prices for materials, higher borrowing costs, and shortages of lots and labor.
The NAR estimates housing starts and completions should be in a range of 1.5 to 1.6-M units to alleviate the chronic shortage. Housing starts are running above a rate of 1.2-M units and completions around a pace of 1-M units.
At February’s sales pace, it would take 3.8 months to clear the stock of houses on the market, up from 3.5 months in January.
Wednesday, the US major stock indexes finished at: DJIA -6.64 at 20661.37, NAS Comp +27.82 at 5821.65, S&P 500 +4.43 at 2348.43.
Volume: Trade on the NYSE was heavy with 1.031-B/shares exchanged
- NAS Comp +8.2% YTD
- S&P 500 +4.9% YTD
- DJIA+4.6% YTD
- Russell 2000 -0.9% YTD
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