February was a good month for real estate, relatively speaking.
Home prices showed mixed results, the pace of home sales quickened and the supply of homes on the market shrank compared with the prior month. Taken together, these results might suggest that home buyers and sellers have begun to adjust their expectations to today’s market realities.
The median price of homes sold in the United States declined from $201,100 in January to $195,900 in February, according to the NATIONAL ASSOCIATION of REALTORS® (NAR). But while the median home price declined nationally and in approximately half of the U.S. metropolitan areas, the median price increased in the other half of the metros. Some places, such as Oklahoma City and Trenton, N.J., posted healthy gains in home prices.
These mixed results suggest that lower prices, along with affordable mortgage interest rates, may have enticed some buyers back into the market. But these results also are a good reminder that all real estate is local and that local markets can--and often do--defy national trends.
Quicker Sales Pace
The annualized pace of home sales increased from 4.89 million in January to 5.03 million in February, according to NAR. This faster pace of sales also might suggest that buyers have become more serious about their purpose. However, the sales pace has fluctuated within a fairly narrow range since last September, so the slightly faster pace in February might not represent an upward trend.
The number of for-sale homes on the market decreased from 4.19 million in January to 4.03 million in February, NAR reported. That dip in supply could be attributed to the faster sales pace, but also might mean some sellers took their home off the market. Builders started construction on only 707,000 new houses, a 25-year low, according to the U.S. Census Bureau.
Keep in mind that one month of positive signs doesn’t necessarily mean the housing market has bottomed out or even stabilized. It’s always a good idea to watch your local market carefully and monitor your area’s trends before you make a real estate decision.
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