Sales of existing homes in the United States jumped in February well above expectations compared to the month before, but the coronavirus outbreak is set to change that.
The data from the National Association of Realtors (NAR) shows the strength of the US economy prior to the outbreak, which has since caused Wall Street to plunge, companies to lay off workers and the country to likely enter recession.
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After a slight decline in January, total sales of single-family homes, townhomes, condos and co-ops rose 6.5 percent in February month-on-month, to a seasonally adjusted annual rate of 5.77 million.
Sales were up 7.2 percent from the year prior, the eighth straight month of gains, while the 8.0 percent jump in prices is the 96th consecutive month of year-over-year increases.
The only area reporting a drop in sales was the northeast US, the NAR said.
The hot housing market, enabled by low interest rates that are now even lower as the Federal Reserve slashed its key rate to zero to bolster the economy against the virus, took a toll on the number of homes available.
Inventory fell in February 9.8 percent from a year ago, even as it grew 5.0 percent compared to January as homebuilders moved to meet demand.
First-time buyers comprised about a third of sales, equal to the months prior.
In a statement, NAR’s chief economist Lawrence Yun attributed the healthy report “to the incredibly low mortgage rates and the steady release of a sizable pent-up housing demand that was built over recent years.”
However, he acknowledged the increase wouldn’t last.
“The coronavirus has undoubtedly slowed buyer traffic and it is difficult to predict what short-term effects the pandemic will have on future sales,” he said.
Calling the outbreak a “temporary pause,” Yun predicted potential buyers will return “with the same enthusiasm.”