Existing home sales in the US jumped 11.8% in February according to the National Association of Realtors (NAR), the highest since March 2018.
- The one-month increase was the biggest jump since December 2015.
- Sales were more than double the expected figure of 5.1 million units.
- The surge is attributable to the drop in mortgage rates and recent Fed policy regarding interest rates.
The housing market may finally be picking up after the interest rates for fixed mortgages dropped and the Federal Reserve indicated that there would be no upcoming rate hikes for 2019. Housing affordability has been seriously impacted by mortgage rates, with home prices rising consistently outpacing wage growth until recently due to land and labor shortages.
January sales were revised slightly lower, but overall the halt to years of rising interest rates appears to be making its presence felt in the housing market.
Chief economist at NAR, Lawrence Yun, described the recent activity as “quite a powerful recovery”.
— NAR Research (@NAR_Research) March 22, 2019
Still in Recovery
However, sales are still 1.8% less than this time last year on a monthly basis. The PHLX Housing Index continued to post losses following the release of the data.
The median house price increased 3.6% on a yearly basis to $249,500 in February. Existing home sales rose in three out of four national regions.
The PHLX Housing Index extended losses following the release of the figures although its decline was less steep than the broader stock market.
The median existing house price increased 3.6 percent from a year ago to $249,500 in February.
Current inventory would take 3.5 months to exhaust at last months pace of sales compared to 3.9 month compared to January’s pace – this is below the ideal 6 – 7-month supply.
Gold prices ticked downward following the positive housing report, dipping from a high of $1,314.77/oz to the mid-range of the session. Gold last traded up 0.83% at $1,311.30/oz, still in positive territory, with a session low of $,1306.15/oz.