The housing market thawed out from a winter freeze in February, warmed up by rising supply.
Existing home sales increased 4.2 percent in February from January to a seasonally adjusted annual rate of 4.26 million, according to a monthly report from the National Association of Realtors. Despite the monthly gain, sales were down 1.2 percent compared to last February.
“Home buyers are slowly entering the market,” NAR chief economist Lawrence Yun said in a statement. “Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”
The median price for existing home sales rose to $398,400, a 3.8 percent increase from the same period in 2024 and the 20th consecutive month of year-over-year price increases. All four regions tracked recorded price gains.
Housing inventory at the end of the month climbed to 1.24 million units, up 5.1 percent from January and 17 percent from one year ago. That represents a 3.5-month supply at the latest sales pace, unchanged from January but up from three months last February.
Regional performance varied. The Northeast saw a 2 percent monthly decrease, but a 4.2 percent annual increase. Midwest sales remained unchanged from January but rose 1 percent from last year. The South experienced a 4.4 percent monthly increase despite being down 4 percent annually. And the West showed the strongest monthly growth at 13.3 percent, with sales remaining identical to a year ago.
First-time buyers accounted for 31 percent of sales in February, up from 28 percent in January and 26 percent a year earlier. Cash sales represented 32 percent of transactions and individual investors purchased 16 percent of homes.
Properties typically remained on the market for 42 days in February, slightly longer than both the previous month (41 days) and last February (38 days).
Zillow chief economist Skylar Olsen expects the “disappointing volume of existing home sales…to be short-lived” as homebuyers remain sensitive to mortgage rates in a time of vast economic uncertainty.
The 30-year fixed-rate mortgage averaged 6.65 percent as of March 13, according to Freddie Mac, slightly up from the previous week but down from 6.74 percent one year ago.
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