Sales of existing homes declined 6.6% in February. The NAR blames a lack of inventory.

Record Low Inventory, Median Price Up 

The NAR reports Existing-Home Sales Fell 6.6% in February

Key Details 

• Existing-home sales fell 6.6% in February to a seasonally-adjusted annual rate of 6.22 million.
• Despite the decline in February sales are still 9.1% higher than last year.
• The median existing-home sales price rose to $313,000, 15.8% higher from one year ago, with all regions posting double-digit price gains.
• February marks 108 straight months of year-over-year gains.
• As of the end of February, housing inventory remained at a record-low of 1.03 million units
• Inventory is down by 29.5% year-over-year – a record decline.
• Properties typically sold in 20 days, also a record low.
• Seventy-four percent of the homes sold in February 2021 were on the market for less than a month.

Regional Details

• Northeast Down 11.5%
• South Down 6.1%
• West Up 4.6%
• Midwest Down 14.4%

Existing Home Sales Data

Lawrence Yun Comments 

1. "Despite the drop in home sales for February – which I would attribute to historically-low inventory – the market is still outperforming pre-pandemic levels."
2. "I still expect this year’s sales to be ahead of last year's, and with more COVID-19 vaccinations being distributed and available to larger shares of the population, the nation is on the cusp of returning to a sense of normalcy."
3. "Many Americans have been saving money and there's a strong possibility that once the country fully reopens, those reserves will be unleashed on the economy."
4. "Home affordability is weakening. Various stimulus packages are expected and they will indeed help, but an increase in inventory is the best way to address surging home costs."

Yun is the NAR's chief economist.

Existing home sales are reported at closing. New home sales are reported at contract signing.

Yun wants an increase in inventory. Assume more people people put their homes on the market. Where will they move? Unless to an apartment, there is no gain in inventory.

There will be increasing inventory of homes as Boomers die off. Otherwise, inventory and lack thereof is a function of new home construction and desire to buy a home, not existing homes placed on the market.

Meanwhile, part of the demand is a renewed faith that home prices will once again "always go up". 

Finally, many of those who want to move from the Midwest find they cannot get enough from their existing home to move to a place more desirable.