The headline existing home sales growth rebounded with the authors saying sales "Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.".

Analyst Opinion of Existing Home Sales

The rolling averages have been slowing since the beginning of 2017, and they marginally decelerated this month. The rolling averages are continue to be marginally in contraction. Housing inventory is now at historical lows for Februarys - and if you do not have enough houses for sale - then that means home sales cannot improve.

Econintersect Analysis

• Unadjusted sales rate of growth decelerated 3.1 % month-over-month, uo 1.3 % year-over-year - sales growth rate trend slowed using the 3 month moving average.
• Unadjusted price rate of growth decelerated 0.6 % month-over-month, up 4.3 % year-over-year - price growth rate trend marginally slowed using the 3 month moving average.
• The homes for sale unadjusted inventory improved this month compared to last month, but remains historically low for Februarys, and is down 8.1 % from inventory levels one year ago).

NAR reported:

• Sales up 3.0 % month-over-month, up 1.1 % year-over-year.
• Prices up 5.9 % year-over-year
• The market expected annualized sales volumes of 5.300 M to 5.620 M (consensus 5.420 million) vs the 5.540 million reported.

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The graph below presents unadjusted home sales volumes.

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Here are the headline words from the NAR analysts:

Lawrence Yun, NAR chief economist, says sales were uneven across the country in February but did increase nicely overall. "A big jump in existing sales in the South and West last month helped the housing market recover from a two-month sales slump," he said. "The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices - especially in the West - shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar."

Added Yun, "The unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month. Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March."

"Mortgage rates are at their highest level in nearly four years, at a time when home prices are still climbing at double the pace of wage growth," said Yun. "Homes for sale are going under contract a week faster than a year ago, which is quite remarkable given weakening affordability conditions and extremely tight supply. To fully satisfy demand, most markets right now need a substantial increase in new listings."

NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says first-time buyers are seeing stiff competition for the available listings in their price range. "Realtors® in several markets note that entry-level homes for first-timers are hard to come by, which is contributing to their underperforming share of overall sales to start the year." she said. "Prospective buyers should start conversations with a Realtor® now on what they want in a new home. Even with the expected uptick in new listings in coming months, buyers in most markets will likely have to act fast on any available listing that checks all their boxes."

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To remove the seasonality in home prices, here is a year-over-year graph which demonstrates a general improvement in home price rate of growth since mid-2012.

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Econintersect does a more complete analysis of home prices with the Case-Shiller analysis.

The home price situation according to the NAR:

The median existing-home price2 for all housing types in February was $241,700, up 5.9 percent from February 2017 ($228,200). February's price increase marks the 72nd straight month of year-over-year gains.

According to the NAR;

First-time buyers were 29 percent of sales in February, which is unchanged from last month and down from 31 percent a year ago. NAR's 2017 Profile of Home Buyers and Sellers - released in late 20175 - revealed that the annual share of first-time buyers was 34 percent.

All-cash sales were 24 percent of transactions in February, which is up from 22 percent in January and the highest since last February (27 percent). Individual investors, who account for many cash sales, purchased 15 percent of homes in February, which is down from 17 percent in January and unchanged from a year ago.

Unadjusted Inventories are below the levels of one year ago.

Total housing inventory3 at the end of February rose 4.6 percent to 1.59 million existing homes available for sale, but is still 8.1 percent lower than a year ago (1.73 million) and has fallen year-over-year for 33 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace (3.8 months a year ago).

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Caveats on Use of NAR Existing Home Sales Data

The National Association of Realtors (NAR) is a trade organization. Their analysis tends to understate the bad, and overstate the good. However, the raw (and unadjusted) data is released which allows a complete unbiased analysis. Econintersect analyzes using the raw data. Also note the National Association of Realtors (NAR) new methodology now has moderate back revision to the data - so it is best to look at trends, and not get too excited about each month's release.

Econintersect determines the month-over-month change by subtracting the current month's year-over-year change from the previous month's year-over-year change. This is the best of the bad options available to determine month-over-month trends - as the preferred methodology would be to use multi-year data (but the New Normal effects and the Great Recession distort historical data).