Last month home sales fell by 7.1% compared to February 2013 when a number of homes sold was 4.95 million. This meant home sales reached the lowest level seen for any month since July 2012.
The experts are blaming the drop on the weather as well as the QM rule which was introduced in January and which had been anticipated for the previous six months. They point out that much of the country was disrupted by unusual weather patterns last month, combined with continued restrictions on mortgage lending, low inventory levels and less affordable housing compared to a year earlier. In addition some transactions are being delayed so there is hope these figures will improve in the coming months. It’s anticipated that home sales will rise modestly this year due to the expected increase in job creation figures.
This view is reasonably upbeat, but the article in RISMedia goes on to point out that other leading economists are viewing these figures slightly differently. They think the weakness in figures for existing home sales has now been continuing for quite some time and should be taken into account, particularly by the Federal Reserve. Yet another view is that spring should see a bounce back in figures, and that although the drop in sales is due to lower inventory, higher prices and tighter credit, the housing market is still on an upward trajectory.
In February the numbers of foreclosures and short sales accounted for 16% of sales compared with 15% the previous month, and 25% in February last year. When these figures are broken down even further then 5% were short sales while 11% were for foreclosures. Foreclosure homes sold for an average discount of 16% while short sales sold for an average discount of 11%.
Figures for housing inventory show that by the end of February it had increased by 6.4%, reaching 2 million existing homes for sale. This is a 5.2 month supply at the current rate of sales, compared to 4.9 months in January. The median time homes spend on the market was 62 days in February compared to 67 days in January and 74 days in February 2013. Short sales took an average of 94 days to sell last month, and foreclosures took an average of 60 days. Non-distressed homes took an average of 61 days to sell. In February 34% of the homes sold were on the market for less than a month