Existing Home Sales rose 5.1% in February to a seasonally adjusted
annual rate of 4.72 million units. First-time buyers accounted for half of all
home sales during the month. Despite the rise in resales, total housing
inventory at the end of February rose 5.2% to 3.80 million existing homes
available for sale – a 9.7-month supply at the current sales pace. The
national median existing-home price was $165,400 in February, down 15.5%
from a year ago.
New Home Sales increased in February to 337,000 seasonally adjusted
annualized units – 4.7% above the level of sales in January but 41.1%
below that in February of 2008. The inventory of new homes available for
sale declined to a 12.2 months supply at the current sales pace. Still, the
supply of new homes is up more than 25% from a year ago.
Housing Starts rose 22.2% in February to a seasonally adjusted annual
rate of 583,000 units. The increase follows the historic low of 477,000 units
in January. Most of the increase came from multifamily units. Building
permits – generally a reliable indicator of future starts – also increased
3.0% in February to a seasonally adjusted annual rate of 547,000, but are
down from 981,000 in February 2008.
Mortgage Rates also declined in March. The average 30-year fixed rate
for the month was 5.0% – down from 5.13% in February. The Federal
Reserve’s program of purchasing mortgage-backed securities is helping
drive mortgage rates down, thus making homebuying more affordable for
those households who qualify for a loan.
Employment The economy continued to bleed jobs in March, as a net
663,000 jobs were shed and the number of jobs lost in February and
January were revised higher. The national unemployment rate increased to
8.5% – its highest level in 25 years. There were some bright spots: the
Education and Health Care sectors have added 450,000 payrolls in the past
12 months.
Economic Growth The economy contracted by 6.3% from the third to
the fourth quarter of 2008. This is the final estimate of GDP growth
based on more complete data. For comparison, GDP growth in the third
quarter of last year was -5.0%. Federal government spending rose, but
not enough to offset declines in consumer spending (personal
consumption expenditures), spending on equipment and software and
residential fixed investment all of which contributed to the negative
growth number.
Housing Affordability continues to improve. NAR’s Housing
Affordability Index (HAI) rose to 173.5 in February – the highest level
since the index was created in 1971. Declining home prices coupled with
lower mortgage rates helped push up the index reading. While
affordability has risen, there are still a siz-able number of people shut out
from the marketplace because of stringent underwriting standards.