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Home prices in the US continued to show solid growth in most of the country due to limited inventory conditions, but rising prices and severe winter weather caused existing home sales to slip in February. According to the latest existing home sales index report from the National Association of Realtors, completed transactions fell 0.4% to a seasonally adjusted annual rate of 4.60 million in February from 4.62 million in January. Sales were 7.1% below the 4.95 million unit level recorded in February 2013 and the month’s pace of sales was the lowest since July 2012, when it stood at 4.59 million. ‘We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favourable than a year ago,’ said Lawrence Yun, NAR chief economist. ‘Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year,’ he added. The median existing home price for all housing types in February was $189,000, which is 9.1% above February 2013. ‘Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years,’ Yun explained. The NAR data also shows that distressed homes sales, that is foreclosures and short sales, accounted for 16% of February sales, compared with 15% in January and 25% on February 2013. Some 11% of February sales were foreclosures and 5% were short sales. Foreclosures sold for an average discount of 16% below market value in February, while short sales were discounted 11%. Total housing inventory at the end of February rose 6.4% to two million homes available for sale, which represents a 5.2 month supply at the current sales pace, up from 4.9 months in January. Unsold inventory is 5.3% above a year ago, when there was a 4.6 month supply. The median time on market for all homes was 62 days in February, down from 67 days in January and 74 days on market in February 2013. Short sales were on the market for a median of 94 days in February, while foreclosures typically sold in 60 days and non-distressed homes took 61 days. Some 34% of homes sold in February were on the market for less than a month. First time buyers accounted for 28% of purchases in February, up from 26% in January, but down from 30% in February 2013. NAR president Steve Brown believes that student debt appears to be a factor in the weak level of first time buyers. ‘The biggest problems for first time buyers are tight credit and limited inventory in the lower price ranges. However, 20% of buyers under the age of 33, the prime group of first time buyers, delayed their purchase because of outstanding debt,’ he said. ‘In our recent consumer survey, some 56% of younger buyers who took longer to save for a down payment… Continue reading →
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