WASHINGTON—Sales of previously owned homes rose strongly in February, a sign that demand for housing picked up as mortgage rates eased last month.
Sales rose 11.8% in February from the prior month to a seasonally adjusted annual rate of 5.51 million, the National Association of Realtors said Friday.
Economists surveyed by The Wall Street Journal had expected sales would rise 3.2% to a rate of 5.1 million in February.
Compared with a year earlier, sales in February were down 1.8%. Existing-home sales were revised slightly lower for January, to an annual rate of 4.93 million after also declining in December and November.
The National Association of Realtors said there were 1.63 million existing homes available for sale at the end of February, up 3.2% from a year earlier and representing a 3.5-month supply at the current sales pace.
Lawrence Yun, the association’s chief economist, said the latest data represent a “powerful recovery” in existing home sales, driven by lower interest rates and increased inventory. A strong labor market and wage growth are also underpinning the housing market, he said.
The 11.8% month-over-month gain represented the strongest percentage increase since December 2015, according to Mr. Yun. The seasonally adjusted annual rate of 5.51 million was last matched in March of last year.
The February data indicated housing could be poised to recover this spring after starting the first quarter on a rocky footing. Sales of new homes in the U.S. fell 6.9% in January from the prior month, the Commerce Department said last week. Still, the number of existing homes that went under contract in the U.S. rose strongly in January, NAR said last month, a sign of improvement for the housing market.
Last year was the weakest for home sales since 2015. Buyers pulled back in the latter half of 2018, as rising mortgage rates, high home prices, a volatile stock market, concerns that prices would start declining and anxiety about the national political situation all caused a number of buyers to hit pause.
The national median sale price for a previously owned home last month was $249,500, up 3.6% from a year earlier.
Sales were flat on the month in the Northeast, but increased 9.5% in the Midwest. In the West, sales rose 16% in February from January. The South saw sales rise by 14.9% from January.
A strong job market and wage growth all bode well for the housing market currently, although relatively low inventory and high prices could curb those solid fundamentals somewhat.
A gauge of U.S. home-builder confidence stabilized in March after two consecutive monthly increases. The National Association of Home Builders said earlier this week that its index of builder confidence in the market for new single-family homes remained unchanged from a month earlier at 62 in March.
Interest rates were on the rise for most of 2018, but cooled at the turn of the year. The average rate on a 30-year, fixed-rate mortgage was 4.28% the week ended March 21, down from 4.51% in the first week of January, according to Freddie Mac.
News Corp., owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.
Source: Housing Trends Feed