WASHINGTON – Sales of previously owned homes fell short of a 5 million annual rate in February for a second month, showing an industry struggling to gain traction amid rising prices and a lack of inventory.
Closings, which usually take place a month or two after a contract is signed, rose 1.2 percent to a 4.88 million annual rate, the National Association of Realtors reported Monday in Washington. The median value of a house climbed 7.5 percent from the same month last year while the number of properties on the market was little changed.
Prices that are rising faster than incomes, still-tight borrowing standards and a lack of properties from which to choose are preventing Americans from taking advantage of mortgage rates that remain near historical lows. Further labor market gains and a loosening of credit rules might help offset these hurdles as the busiest time of year for real estate agents approaches.
"There are issues in terms of affordability, and credit is still pretty tight for a lot of consumers, particularly those at the mid to low end of the scale," Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Fla., said before the report. "We should see credit getting somewhat easier in the months ahead."
The median forecast of 77 economists surveyed by Bloomberg called for sales to pick up to a 4.9 million annual rate. Estimates ranged from 4.65 million to 5.06 million. January's pace was unrevised at 4.82 million.
The median price of an existing home rose to $202,600 from $188,400 in February 2014, the report showed.
Price gains of this size at this point of the housing rebound "are unhealthy for the market," Lawrence Yun, NAR chief economist, told reporters as the figures were released.
Housing starts plummeted in February by the most since 2011 as plunging temperatures and snow limited construction. Work began on 897,000 houses at an annualized rate, down 17 percent from January and the fewest in a year, the Commerce Department reported earlier this month. The pace was slower than the most pessimistic projection economists surveyed by Bloomberg.
The average 30-year, fixed-rate mortgage dropped to 3.78 percent in the week ended March 19, close to the 3.31 percent rate in November 2012 that was the lowest in data back to 1971, according to Freddie Mac.