FX.co ★ U.S. Existing Home Sales Unexpectedly Spike To Highest Level In A Year

The National Association of Realtors (NAR) recently reported that existing home sales in the U.S. remarkably continued to rise in February, following a significant increase in the previous month.

NAR stated that February saw the existing home sale index jump by 9.5% to an annual rate of 4.38 million, following a 3.1% increase to a rate of 4 million in January. This continued upswing is unexpected, as economists had estimated a 1.5% drop to a rate of 3.94 million.

With this unforeseen growth, the existing home sales reached their peak since reaching an annual rate of 4.530 million in February 2023. NAR Chief Economist Lawrence Yun attributed the growth to an increase in housing supply meeting market demand, and added that demand has been steadily increasing due to population and job growth. However, Yun indicated that future purchases will depend on prevailing mortgage rates and broader inventory choices.

According to the report, total housing inventory at the end of February stood at 1.07 million units, representing a 5.9% increase from January's 1.01 million units and a 10.3% surge from 970,000 units a year prior. At the current sales pace, this unsold inventory indicates a 2.9-month supply, a decrease from January's 3.0 months but an increase from the 2.6 months in February 2023.

The report also indicated that the median price for all existing home types in February was $384,500, marking a 5.7% increase from $363,600 a year ago.

Separately, the Commerce Department is due to release a report next Monday on new home sales for February. Economists are currently predicting a surge to an annual rate of 673,000 in February, following January's rate of 661,000.