Home prices see first year-over-year decline in a decade

The year-over-year price for existing homes declined last month for the first time in more than a decade as sales jumped 14.5 percent and ended a 12-month fall. 

Data released by the National Association of Realtors (NAR) on Tuesday shows that the median existing-home sales price dropped by 0.2 percent to $363,000. The drop ends a streak of 131 months of consecutive year-over-year increases dating back to February 2012, which was a record for consecutive increases. 

The number of sales — which are completed transactions for single-family homes, townhouses, condominiums and co-ops — rose to a seasonally adjusted annual rate of 4.58 million units last month. But the year-over-year number of sales dropped 22.6 percent from the 5.92 million that were sold last February. 

NAR Chief Economist Lawrence Yun said in a release that home buyers are responding to the price declines by buying more. 

“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” Yun said. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.” 

The median prices of existing homes fell the most in the western part of the United States, dropping 5.6 percent. Sales also increased the most last month in this region with the number of units sold rising 19.4 percent to an annual rate of 860,000. 

Median prices rose by 5 percent in the Midwest and by 2.7 percent in the South compared to 2022, but existing home sales still rose 13.5 percent and 15.9 percent in February, respectively. 

Yun said housing inventory levels remained at historic lows, leading to multiple offers on properties. 

The inventory at the end of February was 980,000 units, which was 15.3 percent higher than a year ago but the same as January. 

Single-family home sales rose from a seasonally adjusted annual rate of 3.59 million in January to 4.14 million in February, while the median price for these homes dropped 0.7 percent to $367,500. 

Condominium and co-op sales climbed from 410,000 in January to 440,000 last month, still 32.3 percent lower than a year ago. Prices increased 2.5 percent to $321,000.