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US existing home sales tumble in warning sign for housing market

Monday, March 21, 2016 - 22:14

[WASHINGTON] US home resales fell sharply in February in a potentially troubling sign for America's economy which has otherwise looked resilient to the global economic slowdown.

The National Association of Realtors said on Monday existing home sales dropped 7.1 per cent to an annual rate of 5.08 million units, the lowest level since November.

Sales have been volatile and prone to big swings up and down in recent months following the introduction in October of new mortgage regulations, which are intended to help homebuyers understand their loan options and shop around for loans best suited to their financial circumstances.

Sales fell across the country in February, including a 17.1 per cent plunge in the US Northeast.

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Economists had forecast home resales decreasing 2.8 per cent to a pace of 5.32 million units last month. Sales were up 2.2 per cent from a year ago.

The median price for a previously owned home increased 4.4 per cent to US$210,800 from a year ago.

The housing report runs counter to data showing strong job growth and a stabilization of factory output, which had taken a hit from weaker demand overseas and a strong US dollar.

Housing continues to be supported by a tightening labor market, which is starting to push up wage growth, boosting household formation. But a relative dearth of properties available for sale remains a challenge.

In February, the number of unsold homes on the market rose 3.3 per cent from January to 1.88 million units, but was down 1.1 per cent from a year ago.

At February's sales pace, it would take 4.4 months to clear the stock of houses on the market, up from 4.0 months in January. A six-month supply is viewed as a healthy balance between supply and demand.

REUTERS

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