Housing supply dropped dramatically from January, resulting in a hit to February existing home sales. Compared to January, February closed sales of existing homes dropped 6.6%. CNBC says this dramatic drop exceeded expectations from the National Association of Realtors. Still, compared to February 2020, existing home sales remained 9.2% higher. The supply of homes decreased by 29.5% from this time last year, the largest annual decline on record. CNBC notes that as the housing market enters the busy spring season, homeowners are listing at an unusually slow pace.
At the current sales pace, it would take two months to exhaust this supply. One year ago, there was a three-month supply, which is also considered low.
That tight supply continues to fuel home prices, which were 15.8% higher in February year over year. The median price of an existing home sold during the month was $313,000. That is the highest February price on record. Prices are rising due to bidding wars for homes, but the median was also skewed higher because more sales are occurring on the higher end of the market.
Sales of homes priced above $1 million were 81% higher compared with a year ago. Houses priced between $100,000 and $250,000 fell 11%.