Fewer Homes Sell in February as Mortgage Rates Rise

What Friday’s Economic Reports Tell Us

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Higher mortgage rates depressed home sales in February and an index measuring the outlook for the U.S. economy improved slightly, reports showed Friday.

Here’s a quick look at the most significant economic indicators of the day and what they tell us.

Home Sales

  • Fewer homes sold in February (7.2% fewer) as buyers were deterred by rising mortgage rates, higher and higher prices, and a lack of properties on the market, the National Association of Realtors said. The number of existing homes sold fell to an annualized rate of 6.02 million, the lowest since August of last year and well below the pandemic-era peak of 6.73 million.
  • Prospective buyers have had an increasingly hard time finding homes, especially affordable ones. The number of homes for sale rose very slightly to 870,000 in February from a record low of of 850,000 in February. For perspective, there were over 1.3 million homes for sale as recently as July and 2-3 million for much of the last couple of decades.

Leading Economic Index 

  • The outlook on the U.S. economy improved slightly in February, partly reversing a decline in January, but not reflecting the full impact of Russia’s invasion of Ukraine, according to The Conference Board’s Leading Economic Index. The index measures 10 data points on unemployment, manufacturing orders, building, stock prices and other metrics to shed light on the trajectory of the economy. 
  • Sanctions against Russia and other fallout from the invasion threaten to slow economic growth and further fuel inflation. “The global economic impact of the war on supply chains and soaring energy, food, and metals prices—coupled with rising interest rates, existing labor shortages, and high inflation—all pose headwinds to US economic growth,” Ataman Ozyildirim, senior director of economic research at The Conference Board, wrote in a report. 

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