Sales of existing homes dropped 9.6 percent from 5.4 million in January to 4.88 million in February, according to data released today by the National Association of Realtors.
The decline, attributed to tight credit and low appraisals, erased three months of gains and brought homes sales 2.8 percent below the 5.02 million level of February 2010.
“Despite very affordable mortgage interest rates, credit remains a challenge.” said Ron Phipps, president of NAR.
First-time home buyers bought 34 percent of homes in February, up from 29 percent in January, but down from 42 percent in February 2010.
The national median price for existing homes, including single family homes, condominiums and co-ops, was $156,100 in February, down 5.2 percent from February 2010. Distressed homes sold at a discount accounted for 39 percent of the sales, the NAR said.
Total housing inventory rose 3.5 percent in February to 3.49 million existing homes on the market. At the current pace, it would take 8.6 months to work through the inventory, the NAR said.
The Midwest experienced the biggest month-over-month decline in homes, 12.2 percent. The Midwest also has the lowest median price for existing homes of $122,000, down 5.4 percent from a year ago.
The Northeast had the smallest drop in February, 7.2 percent. The median price in this region is $230,000, down 9.5 percent from a year ago.