Mar 21, 2022 - Economy & Business

There still aren't enough houses

Illustration of an upside-down house forming a downward-pointing arrow.
Illustration: Shoshana Gordon/Axios

Activity in the red hot housing market stumbled in February, with the sharpest monthly decline in existing home sales since May 2020.

Why it matters: It could signal affordability is already slowing the juggernaut residential real estate market, even before March's steep rise in mortgage rates.

  • Affordability will almost certainly get worse. The 30-year fixed mortgage rate is now up to 4.16% — from 3.76% just over two weeks ago — and at its highest level since early 2019.
  • There are still hardly any houses to buy, with inventory just barely off the record low level seen in January.

Details: Sales of previously owned homes in February dropped 7.2% from January levels, even worse than expectations for a 6.2% decline.

  • Sales dropped in all four regions, with the worst tumble in the Northeast (-11.5%).
  • The median selling price was up 15% from a year ago to $357,300.

The bottom line: "The imbalance between housing supply and demand remained severe," Goldman Sachs analysts wrote of the February numbers.

Go deeper: Why soaring mortgage rates might not cool the housing market

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