The tug-of-war between supply and demand in the housing market continued to drive prices higher in February, according to data released by the Federal Housing Finance Agency on Tuesday morning. The FHFA price index increased 0.7 percent on the month, in line with expectations. While the index climbed 7.1 percent on the year, it is still 13.6 percent below its April 2007 peak.
On Monday, the National Association of Realtors reported that total existing home sales — defined as completed transactions involving single-family homes, town homes, condominiums, and co-ops — declined 0.6 percent on the month to a seasonally-adjusted annualized rate of 4.92 million in March. February’s annualized rate was downwardly revised to 4.95 million. That said, March’s rate was 10.3 percent higher than the year-ago period. Sales have no been above year-ago levels for 21 consecutive months…
NAR data also showed that home prices are up 6.2 percent on the month and 11.8 percent on the year, making the strongest increase in the post-crisis era. Low sales and high prices suggests that there is more supply than demand in the market. Given this situation, higher prices are likely to bring more homes to market in April.
Data from Freddie Mac show that the monthly average commitment rate on a 30-year fixed-rate mortgage edged up 0.4 points in March to 3.57 percent. This is still below the annual average for 2012 of 3.66 percent, but is the third consecutive month the average rate has increased.