US existing-home sales fell 3.7% at a seasonally adjusted annual rate of 5.48 million in February, according to the National Association of Realtors.
Economists had forecast that sales fell 2.5% at a seasonally adjusted annual rate of 5.55 million, according to Bloomberg. Sales in January were reported at a 10-year high of 5.69 million.
“Realtors are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” said Lawrence Yun, the NAR chief economist. The inventory of homes available fell 6.4% year-on-year.
The median existing-home price for all types of homes rose 7.7% year-on-year to $228,400. According to the NAR, wealthier investors who are willing to pay in cash make up an above average share of the market, and have a competitive advantage over first-time buyers.
Homebuilder confidence increased to a 12-year high after the election, according to the most recent data from the National Association of Homebuilders. Builders’ optimism rose after President Donald Trump signed an executive order to rescind or revise the waters of the US rule that affects permitting.
If this translates to more building, the shortfall of inventory that has lifted prices to decade highs could start easing. Looser regulations elsewhere could also make it easier for prospective homebuyers to get mortgages.
However, rising interest rates could discourage some existing homeowners from listing their homes on the market.