KEY MARKET INDICATORS as of Mar 26, 2018
February Home Sales, Home Price Growth Accelerates
Sales of both new and existing homes came in stronger in February, but the bigger picture in the housing market remained largely the same, with strong demand constrained by a lack of supply. We are also seeing signs of accelerating home price growth.
Existing home sales increased 3.0% m/m to a seasonally adjusted annual rate of 5.54 million units in February. Inventory level increased seasonally in February, rising 4.6% to 1.59 million units. Despite this increase, housing supply remained at record-low levels, with the implied supply at 3.4 months at current sales pace. Homes were sold quickly after listing. Typical homes stayed on the market for just 37 days in February, vs. 45 days a year ago. For realtors and loan officers, this means that while homebuyers may need more time finding the right home, once they have found the right one, they will act fast to close the sale. The tight housing market condition continued to drive home prices higher, with the median home price up 5.9% from a year ago to $241,700. The combination of strong demand and lagging supply means that home price growth is likely to accelerate in 2018, and the latest home price data from the Federal Housing Finance Agency showed year over year home prices growth of more than 7%.
New home sales reached a seasonally adjusted annual rate of 618,000 units in February, unchanged from the previous month. The median sales price for new homes increased 9.7% from a year ago to $326,800 in February. As we saw from last week’s single-family new construction report, the strongest growth in new home sales this year has been in the West region.
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