U.S. home sales surged in February, boosted by hefty gains in the South and West regions, but a chronic shortage of houses on the market remains an obstacle heading into the spring selling season.
The National Association of Realtors said on Wednesday that existing home sales jumped 3.0 percent to a seasonally adjusted annual rate of 5.54 million units last month. That ended two straight months of declines. January’s sales pace was unrevised at 5.38 million units.
Economists polled by Reuters had forecast existing home sales rising 0.5 percent to a rate of 5.40 million units in February. Sales soared 6.6 percent in the South, where the bulk of sales activity occurs, and vaulted 11.4 percent in the West.
They tumbled 12.3 percent in the Northeast and fell 2.4 percent in the Midwest. Existing home sales, which account for about 90 percent of U.S. home sales, increased 1.1 percent on a year-on-year basis in February.
There is an acute shortage of homes, especially at the lower end of the market. The resulting higher house prices and rising mortgage rates are a constraint for first-time buyers, who have been largely priced out of the market.
The 30-year fixed mortgage rate averaged 4.44 percent last week, not too far from a four-year high of 4.46 percent, according to mortgage finance agency Freddie Mac.
The number of previously owned homes on the market increased 4.6 percent to 1.59 million units in February. Housing inventory was down 8.1 percent from a year ago. Supply has declined for 33 straight months on a year-on-year basis. That was the lowest February inventory on record.
At February’s sales pace, it would take 3.4 months to exhaust the current inventory. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.
The median house price increased 5.9 percent from a year ago to $241,700 in February. That was the 72nd consecutive month of year-on-year price gains.