The National Association of Realtors released a report on Friday showing a sharp pullback in U.S. existing home sales in the month of February.
NAR said existing home sales plunged by 7.2 percent to an annual rate of 6.02 million in February after surging by 6.6 percent to a revised rate of 6.49 million in January.
Economists had expected existing home sales to tumble by 6.2 percent to a rate of 6.10 million from the 6.50 million originally reported for the previous month.
The steeper than expected pullback came after existing home sales reached their highest annual rate in a year in January.
“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” said NAR chief economist Lawrence Yun. “Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.”
He added, “Monthly payments have risen by 28% from one year ago – which interestingly is not a part of the consumer price index – and the market remains swift with multiple offers still being recorded on most properties.”
NAR said the median existing-home price for all housing types in February was $357,300, up 15.0 percent from $310,600 a year ago.
The report also showed housing inventory at the end of February totaled 860,000 units, representing 1.7 months of supply at the current sales rate. The months of supply is up from a record low of 1.6 months in January.
Next Wednesday, the Commerce Department is scheduled to release its report on new home sales in the month of February.