US Home Prices Fall for the First Time in 11 Years... Sales Volume Increases

U.S. home prices have declined year-over-year for the first time in about 11 years. Existing home sales have returned to an upward trend.

According to the National Association of Realtors (NAR) on the 21st (local time), the median price of existing homes in February was $363,000 (approximately 474.6 million KRW), down 0.2% compared to the same month last year. This is the first year-over-year decline in home prices since February 2012. U.S. home prices had been rising for 131 consecutive months. Compared to the all-time high recorded in June last year ($413,800), prices are more than 12% lower.

By region, the year-over-year decline was larger in the West (5.6% decrease) and Northeast (4.5% decrease), where average home prices are higher. In contrast, home prices in the South and Midwest increased by 2.7% and 5%, respectively, compared to a year ago.

[Image source=AP Yonhap News]

The median price of existing homes in February rose compared to the previous month ($361,200).

Existing home sales also rebounded in the same month. February sales reached 4.58 million units (annualized, seasonally adjusted), a 14.5% increase from the previous month. This far exceeded the expert forecast of 4.2 million units (a 5% increase) compiled by The Wall Street Journal (WSJ).

This is interpreted as a result of increased buyer demand as mortgage rates, which had reached the 7% range in November last year, have stabilized this year. Lawrence Yun, NAR Chief Economist, stated, "Homebuyers aware of mortgage rate changes are taking advantage of the rate declines."

At the end of February, housing inventory stood at 980,000 units, unchanged from the previous month. Compared to the same month last year, inventory increased by 15.3%.