US existing home sales beat expectations in February

Sales of previously owned homes in the United States topped analysts' expectations in February, as increasing inventory allowed more buyers to enter the property market, according to industry data released Thursday.

Existing home sales jumped 4.2 percent last month to an annual rate of 4.26 million, seasonally adjusted, said the National Association of Realtors (NAR).

This was solidly above a 3.95 million prediction by a consensus forecast of analysts, according to Briefing.com.

"Home buyers are slowly entering the market," said NAR chief economist Lawrence Yun.

"Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand," he added in a statement.

The US housing market has been weighed down by elevated interest rates, as the Federal Reserve kept the benchmark lending rate high in recent years to tamp down stubborn inflation.

With mortgage rates still significantly higher than before even as the Fed cautiously started lowering rates, current homeowners who have locked in lower rates have been reluctant to enter the market.

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Compared with a year ago, existing home sales were still 1.2 percent down.

The median price of existing homes was $398,400 last month, up 3.8 percent from one year ago. This was also up from the level in January.

All four major US regions logged price increases.

The popular 30-year fixed-rate mortgage averaged around 6.8 percent as of February 27, just slightly lower than 6.9 percent as of February 29, 2024.

Among individual markets, Yun of the NAR said the group will closely monitor the area surrounding US capital Washington, on expectations that official data will likely show more federal job losses in upcoming months.

"We will see whether or not the job cuts in DC (the District of Columbia) begin to change some of the dynamics in the DC housing market," he told reporters.

He was referring to moves spearheaded by Elon Musk's Department of Government Efficiency (DOGE), which has been working to dramatically reduce the size of the government under President Donald Trump.

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Yun added that demands for federal government employees to return to work could also begin to increase housing demand in the inner suburbs or in Washington itself.

Source: AFP