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In February, sales of existing homes in the U.S. increased by 11.8%. Laura Kusisto of The Wall Street Journal explains that the market appears to be driven by the strong labor market and rising wages. She writes:
Sales of previously owned homes posted their largest monthly gain since 2015 in February, a sign that lower mortgage rates and more attractive prices are helping to lure buyers back to the market just in time for the critical spring selling season.
Existing home sales rose 11.8% in February from the prior month to a seasonally adjusted annual rate of 5.51 million, the National Association of Realtors said Friday. That was the second-strongest monthly gain in home sales ever.
Nonetheless, sales volume was 1.8% below where it was one year ago, indicating the market is recovering but to a lower level than 2017 and early 2018. Other continued signs of softness include higher inventory levels and an increase in the days homes are spending on the market.
“Homes aren’t really flying off the market as they have been, so that’s great news to [buyers] who have been used to a super competitive market,” said Cheryl Young, a senior economist at Trulia.
Lawrence Yun, the Realtors association’s chief economist, said the latest data represented a “powerful recovery” in existing home sales. Among other factors, a strong labor market and wage growth are helping to underpin the housing market, he said.
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