In February, home sales for existing homes dropped by 7.1 percent from January to a total seasonally adjusted 5.08 million, realtor.com reports. Despite this drop, sales were still up 2.2 percent from February 2015.
What is to blame for this drop? It looks like a few things were at play in February, chief among them were heavy snow in the Northeast, a roller coaster of a stock market, and a slightly shorter month.
Although February hurt the overall momentum of the market a little bit, there is no reason to panic, as the demand for buying has not faltered. Despite the median price of existing homes dropping 1.4 percent from January to $210,800, the sticker price was still 4.4 percent higher than it was one year prior.
Of the homes that sold in February, 44.6 percent of them were in the $100,000 to $250,000 range (further evidence of the demand for affordable starter homes). Homes with price tags between $250,000 and $500,000 had the second highest share of homes sold, with 28.4 percent.
Just because February took a step back, there is no reason to believe March will not kick off the spring buying season. It isn’t all good news, though, as affordability is not expected to improve, and buyers have shown patience in waiting until a home they can afford comes along.
Additionally, more individual investors are buying properties, making up 18 percent of February sales and one percent higher than a month earlier. Nearly two-thirds of these buyers pay cash. That's not something that many first-time buyers can do.