by Calculated Risk on 3/21/2016 10:11:00 AM

From the NAR: Existing-Home Sales Fizzle in February

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 7.1 percent to a seasonally adjusted annual rate of 5.08 million in February from 5.47 million in January. Despite last month's large decline, sales are still 2.2 percent higher than a year ago. ...

Total housing inventory at the end of February increased 3.3 percent to 1.88 million existing homes available for sale, but is still 1.1 percent lower than a year ago (1.90 million). Unsold inventory is at a 4.4-month supply at the current sales pace, up from 4.0 months in January.

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in February (5.08 million SAAR) were 7.1% lower than last month, and were 2.2% above the February 2015 rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.88 million in February from 1.82 million in January.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The third graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory decreased 1.1% year-over-year in February compared to February 2015.  

Months of supply was at 4.4 months in February.

This was well below consensus expectations of sales of 5.34 million. For existing home sales, a key number is inventory - and inventory is still low. I'll have more later ...