US existing home sales rose less than forecast in February, as price growth reached its highest level in a year, suggesting a difficult spring selling season.
Existing home sales rose 1.2 percent to a seasonally adjusted 4.88 million in February, the National Association of Realtors (NAR) said on Monday. That was well below the median estimate of economists, which called for a gain of 1.8 percent. Sales had dropped 4.9 percent in January to a seasonally adjusted 4.82 million.
Sales were up in the South and West, were unchanged in the Midwest and dropped in the Northeast, NAR data showed.
“Severe below-freezing winter weather likely had an impact on sales as more moderate activity was observed in the Northeast and Midwest compared to other regions of the country,” said NAR chief economist Lawrence Yun.
He added, “Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels. Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.”
The median existing-home price in February was $202,600, which is 7.5 percent higher than year-ago levels. February marked the 36 consecutive month of year-over-year price gains and the largest since February 2014.
The housing recovery has accelerated in starts and stops over the past two years. Steadily rising mortgage rates in 2013 and 2014 challenged the recovery, as cash-strapped consumers struggled with more stringent lending terms. Mortgage rates have since fallen back below 4 percent on 30-year fixed rate terms, helping to energize buyer interest.
A stronger jobs recovery has also lifted home sales, although tepid wage growth continues to be an issue. US employers have added more than 200,000 jobs each month for the last 13 months, as the unemployment rate has plunged to a more than six-and-a-half year low of 5.5 percent. However, average hourly earnings are rising less than 2 percent year-over-year, raising concerns about the quality of jobs being created.
On Tuesday the Department of Commerce will report on new home sales for February. The sale of new homes is forecast to drop to a seasonally adjusted 470,000 in February from 481,000 in January.
Separately, the Federal Housing Finance Agency will release the monthly housing price index for January.