Sales of existing homes in the US fell to its lowest level in February since July 2012, an indication that the pace of market recovery may be slow, media reports said.
Figures from the National Association of Realtors shows that contract closings on previously owned homes fell 0.4 percent to an annual rate of 4.6 million, with prices up 9.1 percent from the previous year.
Meanwhile, the number of existing units placed on the market climbed 6.4 percent to two million. Given the current activity, it would take 5.2 months to move those units compared to 4.9 months at the end of the previous month. The association noted that a supply of less than five months is considered a tight market.
The moderation in sales since the middle of 2013 reflects a decline in affordability, pick-up in borrowing costs, and more recently bad weather. Notably, faster job growth yielding bigger income gains are needed to boost demand and enable the housing sector to contribute more to the economy.
“There are some headwinds out there,” noted Robert Dye, chief economist at Comerica Inc. in Dallas, who correctly predicted the pace of sales.
“Housing affordability has come down a bit as mortgage rates have come up from recent historic lows. The weather was a factor and we expect that to be turning around shortly.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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