(CN) — Sales of existing homes rebounded in February after declining for the previous two months, the National Association of Realtors said Wednesday, this despite rising prices and a shrinking number of homes on the market.
The Realtors said sales rose 3 percent last month to a seasonally adjusted annual rate of 5.54 million, driven largely by a big jump in sales in the South and West.
“The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices – especially in the West – shot up considerably,” said Lawrence Yun, the association’s chief economist.
“[But] affordability continues to be a pressing issue because new and existing housing supply is still severely subpar,” he said.
Unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month.
“Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March,” Yun said.
The industry group said the median existing-home price for all housing types in February was $241,700, up 5.9 percent from February 2017, when the median price was $228,200.
February’s price increase marks the 72nd straight month of year-over-year gains.
Prices are climbing as the number of sales listings has dropped, the association said. The supply of homes for sale declined 8.1 percent from a year ago to 1.59 million.