{"id":57167,"date":"2017-03-16T04:45:01","date_gmt":"2017-03-16T11:45:01","guid":{"rendered":"https:\/\/redfindevelop.wpengine.com\/blog\/?p=57167"},"modified":"2020-10-06T12:59:48","modified_gmt":"2020-10-06T19:59:48","slug":"home-prices-jumped-in-february-as-sales-were-constrained-by-a-double-digit-inventory-dip","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/home-prices-jumped-in-february-as-sales-were-constrained-by-a-double-digit-inventory-dip\/","title":{"rendered":"Home Prices Jumped in February as Sales were Constrained by a Double-digit Inventory Dip"},"content":{"rendered":"

Home prices in February increased 7.2 percent from a year earlier to a median sale price of $260,900. This was the strongest February for price appreciation in three years. Last month also marks five years, or 60 consecutive months, of year-over-year price increases since the market bottomed-out and began to rebound. \u00a0<\/span><\/p>\n

\"Median-Sale-Price-17\"<\/figure>\n

\u201cThe total level of home equity reached a new peak at the close of 2016, according to recent Fed data,\u201d said Redfin chief economist Nela Richardson. \u201cWhile great for homeowners, continuously strong price growth across the U.S. since 2012 has posed significant challenges for first-time buyers, especially given such low supply in affordable price-tiers. There is a silver lining on the horizon, however. Rising prices and increased equity may tip the scales for homeowners who have been delaying their decision to move up, which could add much-needed starter-home inventory to the market.\u201d <\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
Market Summary<\/th>\nFebruary 2017<\/th>\nMonth-Over-Month<\/th>\nYear-Over-Year<\/th>\n<\/tr>\n<\/thead>\n
Median sale price<\/td>\n$260,900<\/td>\n0.0%<\/td>\n7.2%<\/td>\n<\/tr>\n
Homes sold<\/td>\n170,700<\/td>\n-2.0%<\/td>\n1.8%<\/td>\n<\/tr>\n
New listings<\/td>\n259,100<\/td>\n10.0%<\/td>\n-6.4%<\/td>\n<\/tr>\n
All Homes for sale<\/td>\n678,200<\/td>\n1.0%<\/td>\n-12.9%<\/td>\n<\/tr>\n
Median days on market<\/td>\n60<\/td>\n1<\/td>\n-8<\/td>\n<\/tr>\n
Months of supply<\/td>\n4<\/td>\n0.1<\/td>\n-0.6<\/td>\n<\/tr>\n
Sold above list<\/td>\n19.1%<\/td>\n0.9%<\/td>\n1.1%<\/td>\n<\/tr>\n
Average Sale-to-list<\/td>\n93.4%<\/td>\n-1.1%<\/td>\n-0.2%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Home sales, constrained by a lack of supply, increased just 1.8 percent over last year. February saw a 6.4 percent decline in new listings and a 12.9 percent decline in the overall number of homes for sale, marking the third month in a row inventory has fallen by double-digits and the 17th consecutive month of year-over-year supply declines. <\/span>
\nThe supply shortage\u2019s effect on home prices was most pronounced in the affordable segment of the housing market. Homes priced below $240,000, which represents the lowest tercile of prices across metros analyzed by Redfin, saw February prices increase 8.4 percent year over year and by 100 percent since the market troughed in 2012.
\nIn comparison, mid range homes priced between $241,900 and $432,000, experienced 5.5 percent growth from this time last year and 55 percent since 2012. This strong rate of price growth in conjunction with even gently rising rates set up a challenging environment for 2017 first-time buyers.
\nOn Wednesday the Federal Reserve raised the fed funds rate by a quarter of a percentage point, which may lead to a slight increase in mortgage rates this spring. Based upon last month\u2019s median sale price of $260,900 and a 30-year fixed mortgage rate of 4.2 percent, the average mortgage payment was $150 more per month than the same time last year when the the 30-year mortgage rate was 3.6 percent.
\nIn a recent homebuyer survey<\/span><\/a> conducted by Survey Gizmo, a small handful of buyers said they would stop their home search if mortgage rates exceeded four percent. However, one in four said they would either search in a different neighborhood or purchase a smaller home.<\/span><\/p>\n

\"Inventory-9\"<\/figure>\n

Notwithstanding affordability concerns and low inventory, February still proved to be a strong month for buyer demand. Market speed increased again, making for the fastest February Redfin has on record since 2010. The typical home that sold last month went under contract in 60 days, eight days faster than one year prior. Nearly 15 percent of all homes listed for sale in February were off the market within two weeks, up from 11.7 percent last year.<\/span>
\n\u201cDespite strong buyer demand, many sellers are suffering from analysis paralysis right now,\u201d said Redfin <\/span>Sacramento real estate agent<\/span><\/a> Chris Medina. \u201cProspective sellers greatest fear is they will not find another home to buy. But low inventory is precisely why they have so much power, especially if they list early in the season. The fewer homes that are on the market, the less competition they have from other sellers. Selling before you buy also makes your offer on your replacement home stronger since you\u2019ll have cash in hand. I have not had a single buyer push back when my seller negotiates the option to lease the home back from the buyer for 60 days in order to have time to find their next home. On the contrary, they usually ask, \u2018how much time do you need?\u2019\u201d \u00a0 \u00a0\u00a0<\/span><\/p>\n

Other February Highlights<\/b><\/h3>\n

Competition<\/b><\/p>\n