Median home price increased slightly in February to $189,000, up just 0.6% from the previous month. Prices remain significantly above those seen at this time last year with February posting a 9% year-over-year gain, and many sellers continue to benefit from equity gains accrued in last year?s substantial price recovery.
The pace of home sales remained essentially unchanged from January to February with NAR reporting an annual pace of 4.6 million homes. Sales were down 0.4% month to month and down 7.1% from the same month last year. Winter weather likely played a role in the slow pace of home sales in February, particularly in the northeast and Midwest regions of the country; however, some of the drop-off in home sales is likely attributable to a decrease in the number of distressed sales occurring around the country. NAR reported that 16% of home sales in February were distressed, down from 25% in the same month of last year. As we move out of the winter months, and lenders and consumers adjust to the changes in affordability and regulation, we should see sales begin to pick back up.
Inventory levels picked up once again with 2 million available for purchase, up 5% from last year. This represents 5.2 months of inventory at the current sales pace, which is up 13% from last year and up 6% from the previous month. As we move further into the year, we should continue to see inventory loosen, giving buyers more choices and putting less upward pressure on prices.
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