Supported by historically low interest rates and rising demand, existing home sales, as reported by the National Association of Realtors (NAR), surged to 13-year high in February after a slight decline in January. Unfortunately, this will mark the high water mark for some time due to virus concerns.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 6.5% to a seasonally adjusted annual rate of 5.77 million in February, highest level since February 2007. On a year-over-year basis, sales were 7.2% higher than a year ago.

The first-time buyer share remained at 32% in February from both last month and a year ago. The February inventory level rose to 1.47 million units from 1.40 million units in January but decreased from 1.63 million units a year ago.

At the current sales rate, the February unsold inventory represents a 3.1-month supply, equal to last month but down from a 3.6-month a year ago.

Homes stayed on the market for an average of 36 days in February, down from 43 days last month and 44 days a year ago. In February, 47% of homes sold were on the market for less than a month.

The February all-cash sales shared 20% of transactions, down from 21% last month and 23% a year ago.

The February median sales price of all existing homes was $270,100, up 8.0% from a year ago, representing the 96th consecutive month of year-over-year increases. The median existing condominium/co-op price of $249,900 in February was up 7.0% from a year ago.

Regionally, all regions saw an increase in existing home sales in February except the Northeast, compared to previous month. Sales in the Midwest, South and West grew 0.8%, 7.2% and 18.9%, while sales in the Northeast declined 4.1% from last month. However, on a year-over-year basis, sales rose in all four major regions, ranging from 2.9% in the Northeast to 11.5% in the West.

Although existing home sales remains on an upward trend in February, a recent reduction in buyer traffic indicates that the housing market recovery is likely to be derailed by the coronavirus pandemic. Meanwhile, supported by low mortgage rates and tight inventory, builder confidence remains solid in March, though sales expectations for the next six months dropped four points on economic uncertainty stemming from the coronavirus.

As 2020 begins, NAHB’s Eye on Housing is reviewing the posts that attracted the most readers over the last year. In February, Carmel Ford highlighted findings from a special study that examined reasons behind households moves.

Data from the 2017 American Housing Survey (AHS) show that over half of recent home buyers – 55 percent – move ‘for a better home’ (Graph 1). Home buyers also move for ‘a better neighborhood’ (46 percent) and ‘to form a household’ (39 percent). In contrast, smaller shares of home buyers report moving ‘for a job’ (14 percent) and ‘to reduce their commute’ (12 percent).

For its February Special Study, NAHB used data from the 2017 American Housing Survey (AHS) to create a profile of recent home buyers (those who bought a home in the two years preceding the 2017 AHS). The AHS is a nationally representative survey of residential structures in the US and of the households that occupy them (sponsored by the US Department of Housing and Urban Development and conducted by the Census Bureau biennially in odd-numbered years).

The data also provide insight on why first-time buyers move compared to trade-up buyers (defined as those who previously owned a home). First-time home buyers are more likely to move ‘for a better home’ (65 percent) than trade-up buyers (49 percent) (Graph 1). Unsurprisingly, first-time home buyers are also more likely to move to ‘form a household’ (61 percent) than trade-up buyers (25 percent). About the same shares of first-time home buyers and trade-up buyers move for ‘a better neighborhood’: 49 percent and 45 percent, respectively.

Please visit the special study page to view the full report, Characteristics of Recent Home Buyers. There, you can also find history tables of the data going back to 2001.

The Census Bureau’s latest Survey of Construction (SOC) shows changes in the number and shares of bathrooms and half-bathrooms of single-family homes started in the United States in 2018. The latest year’s data show that 3% of new single-family homes started had one bathroom or less, 64% had 2 bathrooms, 26% had 3 bathrooms, and 8% had 4 bathrooms or more. The term “bathroom” as used in this post refers to a full bathroom.

The above figure shows that the shares of new single-family homes started with 1 bathroom or less, 3 bathrooms, and 4 bathrooms or more declined from 2017, but the share of new single-family homes started with 2 bathrooms increased. Additionally, the share of new homes with 2 bathrooms has consistently exceeded the other bathrooms-per-unit categories.

The widespread decline in shares of bathrooms per unit is correlated with the increasing median sale and contract price per square foot; as building costs increase, builders find it more prudent to install new single-family homes with fewer bathrooms, typically in the starter market for first-time homebuyers.

A previous analysis on bathrooms and half-bathrooms in the Survey of Construction points to a correlation between more starter homes (for first-time home-buyers) constructed in a given year and fewer number of full bathrooms per unit. A closer look at the data shows that new single-family homes between 2,000 and 2,399 square feet have maintained more stable shares in the number of bathrooms per unit from 2017 to 2018 than any of the other sizes of the houses surveyed.

As in previous years, the 2018 SOC data show variation in the number of bathrooms by Census division.

As seen in the above figure, the shares of new homes started in 2018 with 3 bathrooms or more was 34% of all new single-family homes started, a decline from 36% in 2017. The Pacific, Mountain, and West North Central regions were the only Census divisions post gains in shares of new homes started with 3 bathrooms or more from the prior year.