New York March 21 2023: The median sales price of a previously owned US home slid in February for the first time since 2012, offering some relief for buyers still faced with high borrowing costs.
The median price slipped 0.2% in February from a year earlier to $363,000, according to the National Association of Realtors. The decrease was fueled by a 0.7% drop in the cost of single-family homes and coincided with a bigger-than-expected jump in sales during the month.
The retreat “is the strongest green shoot in an otherwise dismal housing market,” Robert Frick, corporate economist at the Navy Federal Credit Union, said in a note. He added that “prices need to drop more, and across more markets, before a general revival can occur.”
The figures released Tuesday showed median selling prices decreased from a year earlier in the West and Northeast — the most expensive regions in the nation. Prices in the Midwest and South posted gains.
Overall, contract closings on existing homes jumped by the most since mid-2020, reaching an annualized pace of 4.58 million and ending a record year-long slide. Despite the pickup, residential real estate remains constrained by the Federal Reserve’s aggressive policy tightening campaign that sent mortgage rates soaring last year and sidelined many prospective buyers.
The median selling price in the West dropped 5.6% from February 2022, the biggest annual decline since late 2011. Lawrence Yun, NAR chief economist, said the drop likely helped fuel a pickup in the region’s sales. Median prices in the Northeast decreased 4.5%, also the most in more than a decade.
While lower list prices could bring more potential buyers off the sidelines, high borrowing costs are putting the squeeze on affordability and a lack of homes for sale could limit how far prices will fall.
Data earlier this month also suggested home prices may have peaked. A Redfin Corp. report showed prices also hit a turning point last month, dropping from a year ago for the first time since 2012.