Existing Home Sales Dip for Sixth Time in Seven Months

Sales of existing U.S. homes fell slightly again in February, while the median home price edged up, according to the National Association of Realtors.

Total existing home sales slipped 0.4 percent last month to a seasonally adjusted annual pace of 4.60 million homes compared with a 4.62 million pace in January. Sales are also down 7.1 percent from February 2013.

“We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago,” said NAR chief economist Lawrence Yun in a statement. “Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year.”

Meanwhile the median home price rose to $189,000, up from $187,900 in January and up 9.1 percent from the previous year. Low interest rates aided buyers in keeping up with the price increases. The average rate on a 30-year fixed rate conventional mortgage fell to 4.30 percent in February, down from 4.43 percent the month before, according to mortgage guarantor Freddie Mac.

First-time home buyers accounted for 28 percent of all sales in February, up slightly from January’s 26 percent , but still down from 30 percent the year before.

“The biggest problems for first-time buyers are tight credit and limited inventory in the lower price ranges,” said NAR President Steve Brown. “However, 20 percent of buyers under the age of 33, the prime group of first-time buyers, delayed their purchase because of outstanding debt. In our recent consumer survey, 56 percent of younger buyers who took longer to save for a downpayment identified student debt as the biggest obstacle.” Brown suggests it may take time for younger buyers to work through their debt issues before we see a significant rise in first-time homebuyer market share.

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