Sales of existing homes reached their lowest pace since July 2012 with an annual sales rate of 4.6 million units in February, according to a National Association of Realtors report. Harsh winter conditions continue to depress sales, according to the group's economist, and could lead to a bounce-back in the spring months to come.

Existing home sales declined to a seasonally adjusted annual rate of 4.60 million units in February, down 0.4 percent from 4.62 million in January and 7.1 percent below the 4.95 million-unit level in February 2013. February's sales pace was the lowest since July 2012, when it stood at 4.59 million.

Lawrence Yun, NAR chief economist, said conditions in February were largely unchanged from January. "We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago," Yun said. "Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year."

Total housing inventory at the end of February rose 6.4 percent to 2.00 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 4.9 months in January. Unsold inventory is 5.3 percent above a year ago, when there was a 4.6-month supply.

The median time on market for all homes was 62 days in February, down from 67 days in January and 74 days on market in February 2013. Short sales were on the market for a median of 94 days in February, while foreclosures typically sold in 60 days and non-distressed homes took 61 days. Thirty-four percent of homes sold in February were on the market for less than a month.

Single-family home sales fell 0.2 percent to a seasonally adjusted annual rate of 4.04 million in February from 4.05 million in January, and are 6.9 percent below the 4.34 million-unit level in February 2013.

Distressed homes accounted for 16 percent of February sales, as 11 percent of February sales were foreclosures, and 5 percent were short sales. Distressed homes comprised 15 percent of the market in January and 25 percent in February 2013.

First-Timers Still Frustrated
First-time buyers accounted for 28 percent of purchases in February, up from 26 percent in January, but down from 30 percent in February 2013.

"The biggest problems for first-time buyers are tight credit and limited inventory in the lower price ranges," said NAR President Steve Brown. "However, 20 percent of buyers under the age of 33, the prime group of first-time buyers, delayed their purchase because of outstanding debt. In our recent consumer survey, 56 percent of younger buyers who took longer to save for a down payment identified student debt as the biggest obstacle."

The median existing-home price for all housing types in February was $189,000, which is 9.1 percent above February 2013. "Price gains have translated into an additional $4 trillion of housing wealth recovery over the past three years," Yun said. The median existing single-family home price was $189,200 in February, up 9.0 percent from a year ago.

Regionally, existing-home sales in the Northeast fell 11.3 percent to an annual rate of 550,000 in February, and are 12.7 percent below February 2013. Sales in the Midwest declined 3.8 percent in February to a pace of 1.00 million, and are 12.3 percent below a year ago.

In the South, existing-home sales rose 1.5 percent to an annual level of 1.98 million in January, but are 0.5 percent below February 2013. Sales in the West rose 5.9 percent to a pace of 1.07 million in February, but are 10.1 percent below a year ago.