Existing home sales rebounded in February after two monthly declines in a row. According to analysts at Wells Fargo, it was likely driven by unseasonably wild and dry weather. They expect home sales to gradually gain momentum.
Key Quotes:
“Existing home sales rose 3.0 percent in February, with single-family homes accounting for all of the gain. Sales of single-family homes rose 4.2 percent to a 4.96-million unit pace. That gain offset a 6.5 percent decline in resales of condominiums and co-ops.”
“February’s rebound was likely driven by unseasonably wild and dry weather in much of the West and South, which allowed for more home buying than usual during the slow winter months. The weather was not as accommodating in the Northeast and Midwest in March, which have seen snowstorms every week, and promises to be even worse.”
“Winter is a difficult time to assess the health of home sales. February’s 3.0 percent rise in existing home sales essentially reversed a 3.2 percent drop in January. Home sales continue to be constrained by a lack of supply, particularly of lower-priced homes.”
“With fewer lower-priced homes available, the median price of an existing homes has risen 5.9 percent over the past year to $241,700. This marks the strongest yearly increase since July 2017. The rise in prices reflects the competitive environment for homes in many parts of the country.”
“We expect home sales to gradually gain momentum this year, but reports for the next few months will be heavily influenced by the weather and continued lack of supply. There has been a persistent widening in the gap between the share of consumers that feel now is a good time to sell a home and those that eel now is a good time buy. Hopefully that will bring on more supply this spring and help stem the sharp run-up in prices.”
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