WASHINGTON (AP) — U.S. home sales soared 11.8 percent in February, aided by accelerating wages and falling mortgage rates that are improving affordability.
The National Association of Realtors said Friday that existing homes sold at a seasonally adjusted annual rate of 5.51 million last month, a decisively sharp rebound from a pace of 4.94 million in January.
The burst in sales points to the housing market regaining the momentum that it lost in the middle of 2018, after a spike in rates for home loans caused sales to slow. The February sales figures point toward growth in sales of homes priced between $250,000 and $500,000, a range that is generally affordable to middle-class families.
"It is very welcoming to see more inventory showing up in the market," said NAR Chief Economist, Lawrence Yun. "Consumer foot traffic consequently is rising as measured by the opening rate of SentriLock key boxes."
NAR's SentriLock data, for key access to unlock a home, was measurably higher in January and February compared to the second half of 2018.
Still, existing-home sales are down 1.8 percent from a year ago because of the severity of last year's slowdown. But 30-year mortgage rates have since tumbled after peaking in early November at roughly 5 percent, helping sales to recover as that average has fallen to 4.28 percent this week, according to mortgage buyer Freddie Mac.
The median sales price in January was $247,500, a slight increase of 3.6 percent from last year. Home price growth has been converging with average hourly wage gains in recent months.
However, February's sales bust caused the months' supply of homes on the market to tumble to 3.5 months from 4.4 months in September.
"For sustained growth, significant construction of moderately priced-homes is still needed. More construction will help boost local economies and more home sales will help lessen wealth inequality as more households can enjoy in housing wealth gains," said Yun.
A typical homeowner accumulated an estimated $8,700 in housing equity over the past 12 months and $21,300 over the past 24 months.
Realtor.com's Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in January were Midland, Texas; Chico, California; Colorado Springs, Colorado; Spokane-Spokane Valley, Washington; and San Francisco-Oakland-Hayward, California.
Sales climbed in the Midwest, South and West in February but were unchanged in the Northeast.