Existing-home sales up in February, market faces spring challenges

U.S. existing-home sales rose slightly in February, increasing 1.7% from the previous month, though activity remained lower than a year earlier, according to new data released Tuesday by the National Association of Realtors (NAR).

The organization reported sales reaching a seasonally adjusted annual rate of 4.09 million in February. Compared with the same month last year, transactions declined 1.4%.

“Housing affordability is improving, and consumers are responding,” said NAR Chief Economist Lawrence Yun. “Still, there is a long way to go to return to pre-pandemic levels of transaction activity. There are more than 6 million more jobs than in 2019, yet home sales per year are down by one million.”

Housing affordability continued to strengthen for the eighth consecutive month.

NAR’s Housing Affordability Index rose to 117.6 in February, up slightly from 117.1 in January and significantly higher than 103.1 one year earlier — the highest reading since March 2022.

“Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains,” Yun added. “Wage growth is now outpacing home price growth by almost four percentage points. Mortgage rates are also measurably lower compared to a year ago.”

Lisa Sturtevant — chief economist at Bright MLS — said multiple factors continue to subdue transaction volume.

“Even though there is pent-up demand in the market, there appears to be little urgency on the part of either buyers or sellers,” she said. “While sales ticked up seasonally between January and February, economic uncertainty and potentially winter weather kept more buyers from entering the market last month. A lack of inventory is also a constraint.”

Inventory and prices

Housing supply expanded modestly in February. Total inventory rose to 1.29 million units, a 2.4% increase from January and a 4.9% gain compared with February 2025.

At the current pace of sales, that supply represents 3.8 months of homes on the market — unchanged from January and slightly higher than the 3.6 months recorded a year earlier.

“Inventory is growing, but sluggishly,” Yun said. “If demand picks up notably in the coming months and outpaces supply growth, home prices will inevitably rise. That is why increasing supply is so important to help limit home price growth, improve housing affordability, and boost transactions.”

The median price for existing homes across all housing types was $398,000 in February, up 0.3% from $396,800 a year earlier. The increase marks the 32nd consecutive month of year-over-year price gains.

Regional trends

Sales activity varied across the country.

In the Northeast, sales fell 6.0% from January to an annual rate of 470,000 and declined 4.1% compared with February 2025. The median price in the region rose 3.3% to $479,800.

The Midwest recorded a 1.1% monthly increase to an annual rate of 940,000, though sales were still down 4.1% year over year. The median price reached $302,100, a 2.3% increase.

In the South — the nation’s largest housing market — sales rose 1.6% from January to an annual rate of 1.89 million and were 0.5% higher than a year earlier. The median price climbed 0.2% to $356,800.

The West posted the strongest monthly gain, with sales jumping 8.2% to an annual rate of 790,000. Transactions remained 1.3% below the level recorded in February 2025. The median price declined 1.9% to $603,100.

Buyers and market activity

Single-family home sales increased 2.5% in February to an annual rate of 3.73 million, though they were still 1.1% below the level from a year earlier.

The median price for single-family homes was $401,800 — up 0.2%.

Condominium and co-op sales declined 5.3% from January to an annual rate of 360,000 and were also down 5.3% compared with February 2025. The median price for those properties rose 0.9% to $358,100.

Homes remained on the market slightly longer, with a median of 47 days in February, compared with 46 days in January and 42 days a year earlier.

First-time buyers accounted for 34% of purchases, up from 31% both the previous month and a year earlier. Cash sales represented 31% of transactions, increasing from 27% in January but down slightly from 32% a year earlier.

Individual investors or second-home buyers made up 16% of transactions, unchanged from both the prior month and the same period last year. Distressed sales — including foreclosures and short sales — accounted for 3% of sales, up from 2% in January and unchanged from February 2025.

Mortgage rates, spring outlook

Mortgage rates eased slightly during February. The average rate for a 30-year fixed mortgage was 6.05%, according to Freddie Mac — down from 6.10% in January and 6.84% one year earlier.

However, the outlook for the upcoming spring homebuying season has become less certain, Sturtevant said.

“Despite mortgage rates falling below 6% briefly, international conflict has sent them higher in recent days,” she said. “If the conflict with Iran is limited, the housing market could rebound quickly. However, a prolonged conflict could stall home sales activity this spring.”