US Home Sales Rise in February as Mortgage Rates Ease/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Existing home sales rose 4.2% in February from the previous month. Mortgage rates remained steady, encouraging buyers to re-enter the market. Housing inventory increased 17% year-over-year, providing more choices for buyers.
Housing Market Quick Look
- Total home sales: 4.26 million (seasonally adjusted annual rate).
- Month-over-month change: +4.2%.
- Year-over-year change: -1.2%.
- Median home price: $398,400 (+3.8% from last year).
- Inventory: 1.24 million homes (+17% YoY).
US Home Sales Rise in February as Mortgage Rates Ease
Deep Look: More Inventory and Stable Rates Boost February Home Sales
Sales of previously owned U.S. homes climbed in February as mortgage rates held steady and more homes became available, giving buyers additional options.
The National Association of Realtors (NAR) reported Thursday that existing home sales rose 4.2% from January, reaching an annualized rate of 4.26 million units. While that figure was down 1.2% from February 2024, it exceeded economists’ expectations of 3.92 million sales, according to FactSet.
Why Did Home Sales Increase?
A combination of favorable mortgage rates and higher housing supply helped drive the increase.
“Home buyers are slowly entering the market,” said Lawrence Yun, NAR’s chief economist. “Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”
The 30-year fixed mortgage rate has remained relatively stable around 6.8%, significantly lower than its 2023 peak of 7.8%. Lower borrowing costs make home purchases more affordable, prompting buyers to return to the market after months of uncertainty.
Home Prices Continue to Climb
Despite the increase in available properties, home prices continued their upward trend. The national median sales price hit $398,400 in February, up 3.8% from a year earlier. This marked the 20th consecutive month of annual price gains, reflecting continued demand in a competitive market.
More Homes on the Market
One of the biggest shifts in the housing market has been the increase in available inventory. There were 1.24 million unsold homes at the end of February, a 5.1% rise from January and a 17% increase from a year ago.
That translates to a 3.5-month supply at the current sales pace, unchanged from January but up from a 3-month supply last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers, suggesting that while inventory is improving, the market remains tilted toward sellers.
What’s Next for the Housing Market?
With mortgage rates stabilizing and inventory growing, the spring homebuying season could see further improvement. However, affordability concerns still linger, and continued price growth may keep some buyers on the sidelines.
If mortgage rates dip further, it could fuel additional demand, especially as buyers look to take advantage of improved inventory levels.
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