ARLINGTON, Va.—Amid the COVID-19 crisis, there is one good economic sign—at least for now.
Existing-home sales jumped 6.5% in February to a seasonally adjusted annual rate of 5.77 million units, which represents a 7.2% increase in sales versus a year ago.
In response, NAFCU Chief Economist and Vice President of Research Curt Long said this performance reversed January's decline and put 2020 off to a solid start.
“The findings are through February, though, before the significant effects of COVID-19 began to trigger stay-at-home orders and business shutdowns nationwide,” said Long. “With the proliferation of social distancing, housing demand is likely to drop. However, unlike equity prices, homes may retain their values due to the housing shortage."
The median existing home price rose from $266,200 in January to $270,100 in February. That amount represents an 8% increase from a year ago.
Based on current sales, there was 3.1 months of supply at the end of February, unchanged from January. Analysts consider six months of supply to be roughly balanced between supply and demand.
“NAFCU expects existing home sales to drop significantly in the next several months before rebounding in the fall,” Long concluded.