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First Cut: February existing home sales show renewed vigor

Sales of existing homes jumped 11.8% in February to 5.510 million units (SAAR) from 4.930 million in January and was the highest since 5.510 million in March 2018. Consumers have responded to the fall in mortgage interest rates and moderation in home prices with committing to a purchase while conditions are more favorable. Compared to a year ago, sales were down 1.8%.

In particular, the rise was concentrated in a 13.3% increase in single-family units to 4.94 million whole multi-unit purchases were flat.

Some buyers may be trying to lock in a contract before limited supplies of available units grow any tighter. The months’ supply of homes fell to 3.5 in February, the lowest since 3.4 in February 2018.

By regions, sales in the Northeast were unchanged, while gains were hefty for the Midwest (up 9.5%), South (up 14.9%), and West (16.0%).

The median prices of a existing home was only marginally higher at up 0.1% in February from January, and a modest up 3.6% year-over-year. With signs of more active conditions, sellers may be more willing to bring properties on to the market in hopes that limited supplies will boost future prices.

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