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Summary
- Home sales fell 6.6 percent in February as supplies continue to drop.
- The number of homes were down 29.5 percent in February, compared to the same period last year.
- The 30-year fixed mortgage rate of 3.09 percent recorded in the week ended last Thursday was the highest level since June.
With fewer number of houses for sale on the market, US realtors face the prospect of a lacklustre spring selling season.
Most American families typically look to buying new homes in spring ahead of the start of a new school year to avoid inconvenience for their wards as they resume classes.
This year, however, homeowners have been reluctant to sell, fearing covid uncertainties may make it hard for them to find new homes once they dispose them of.
According to the National Association of Realtors, the number of homes for sale was down 29.5 percent in February 2021, compared to the corresponding period in the previous year.
At 1.03 million homes, the figure stayed same in January and February, the lowest number since 1982, the NAR said on Monday. Economists say that home shortage was the main reason for drop in sales, and not demand. Last year’s Low interest rates had accelerated home sales, which usually took less than three weeks to complete the process.
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More Real Estate Agents Than Houses
The average home price rose 15.8 percent to USD 313,000 in February, from a year ago period. Also, the number of homes available at the end of February will last only for two months, it said, noting that there were more real estate agents than houses on the market.
Moreover, the February figures may be reflecting the done deals in December or January since home contracts usually take at least a month or two before they are closed. Therefore, the percentage of decline may slip further in March, said the NAR.
Mortgage rates have also picked up in February and March, compared to last year’s levels. The 30-year fixed mortgage rate of 3.09 percent in the week ended last Thursday was the highest level since June, according to an analyst. Regions that saw a significant drop in home sales include Midwest and Northeast; however, sales were up in the West.
The Commerce Department said last week that home-building fell 10.3 percent in February compared to the previous month. This was due to the lack of sufficient number of skilled people to meet the construction demand, it observed. Most workers had stayed away from work due to the pandemic.
