Sales of existing homes in the U.S. soared 11.8% in February, aided by accelerating wages and falling mortgage rates that are improving affordability.
The National Assn. 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 surge in interest 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.
Still, sales of existing homes are down 1.8% from the same month a year earlier 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%, helping sales to recover as that average has fallen to 4.28% this week, according to mortgage buyer Freddie Mac.
The median sales price in January was $247,500, a slight increase of 3.6% from last year. Growth in home prices has been converging with average hourly wage gains in recent months.
February’s burst of sales caused the supply of homes on the market to tumble to 3.5 months, down from 4.4 months in September.
Sales climbed in the Midwest, South and West in February but were unchanged in the Northeast.