February U.S. Home Sales Decline

Sales of previously owned U.S. homes declined in February to a six-month low, reflecting a record annual decline in the number of available properties, says the National Association of Realtors. Contract closings decreased 6.6 per cent from the prior month to an annualized 6.22 million from a downwardly revised 6.66 million in January. Higher asking prices, tied in part to a limited number of homes on the market, and rising mortgage rates are reducing affordability in the lead up to the spring selling season. At the same time, demand is up 9.1 per cent from a year ago and indicates sales will probably hold up as the economy strengthens and employment improves. Housing inventory in February was 1.03 million units. At the current pace, it would take two months to sell all the homes on the market, compared with 3.1 months last February. Anything below five months of supply is a sign of a tight market.