Home prices plummet for the first time in ten years

Home prices in February fell year-on-year for the first time in more than a decade as a sharp slowdown in the market forced sellers to cut back on their listings.

The median selling price for US homes fell to $363,000 in February, according to data from the National Association of Realtors released Tuesday.

That was down 0.2% from the same month last year, when the median price was $363,000.

The downtrend marked a streak of 131 consecutive months in which prices were up year-on-year – the longest streak of this kind on record.

The US housing market has suffered as the US Federal Reserve’s rate hikes have led to high volatility in long-term mortgage rates.

“The rate of price decline is limited by the lack of existing homes coming onto the market … but even the relatively small number of homes listed are taking longer to sell,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

The most notable declines occurred in the West, where median prices fell 5.6% to $541,000 over the past month, and in the Northeast, where median prices fell 4.5% to $366,100.

The NAR’s results coincided with the latest data released by real estate firm Redfin, which also said earlier this month that it had seen its first year-on-year fall in home prices since February 2012.

While prices fell for the month, the volume of existing home sales rose 14.5% in February to a seasonally adjusted annualized rate of 4.58 million – the first increase in 12 months. Revenue was still down 22.6% from the same month a year ago.

The surge in sales volume coincided with a fall in long-term mortgage rates last month, which fell to just over 6% in February after rising over 7% last fall.

“Homebuyers are aware of changing mortgage rates and are benefiting from rate declines,” said Lawrence Yun, NAR’s chief economist. “Additionally, we are seeing stronger sales growth in areas where property prices are falling and the local economy is creating jobs.”

Mortgage rates have spiked again this month – raising the likelihood that the pick-up in housing activity will be short-lived.

“A significant decline in sales in March, perhaps to a new cycle low, is likely,” Shepherdson added.

The housing market will get its next clue as to the likely path for mortgage rates when the Federal Reserve announces on Wednesday whether it will hike interest rates. Investors are currently betting on a quarter of a percentage point despite the recent turmoil in the US banking sector.

As The Post reported, some pundits have suggested that if the Fed slows or suspends rate hikes, mortgage rates could start falling.