Lower rates and easing prices nudged more buyers off the sidelines in February
Existing-home sales in the United States edged up in February as slightly lower mortgage rates and a modest easing in prices gave buyers some long-awaited breathing room, even as activity stayed well below pre‑pandemic norms.
The National Association of Realtors (NAR) reported a 1.7% month‑over‑month rise in existing home sales to an annual pace of 4.09 million, beating many economists’ expectations.
Sales were still down 1.4% from a year earlier, and inventory, while up 4.9% year‑over‑year to 1.29 million units, remained lean at 3.8 months of supply – a level that continued to favor sellers rather than buyers.
“Housing affordability is improving, and consumers are responding,” NAR chief economist Lawrence Yun said.
“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.”
Yun said that even with the modest rise in home sales, overall housing demand remained muted compared with the strength of wage growth and job gains.
“Wage growth is now outpacing home price growth by almost four percentage points. Mortgage rates are also measurably lower compared to a year ago.”
Yun said inventory was increasing, but only slowly. He warned that if demand outpaced that limited supply, home prices would inevitably rise. That, he said, made adding more homes to the market essential to contain price growth and improve affordability.
Subtle shift in prices, rates and inventory
The national median existing‑home price in February stood at $398,000, up 0.3% from a year earlier and marking the 32nd straight month of annual price gains.
Single‑family sales rose 2.5% from January to a 3.73 million rate, with a median price of $401,800. Condo and co‑op sales dropped 5.3% to 360,000, though their median price inched up to $358,100.
Properties spent a median of 47 days on the market, compared with 42 days a year earlier. First‑time buyers accounted for 34% of sales, up from 31% in January, while cash buyers made up 31% of transactions. Distressed sales held at 3%.
NAR’s Housing Affordability Index rose for the eighth straight month to 117.6 in February, its highest reading since March 2022.
Economists see a cautious path forward
Bankrate housing market analyst Jeff Ostrowski said the winter slowdown turned out to be less severe than first reported.
“Home sales in January weren’t quite as bad as originally reported,” he said, noting NAR’s revision of January’s pace to 4.02 million and February’s uptick to 4.09 million. He said that during the pandemic, annual home sales ran well above 6 million, compared with more than 5 million in a typical pre‑pandemic year.
“Appreciation has slowed to a crawl, but existing home prices keep inching up, at least nationally,” Ostrowski said.
“The median price of existing homes was $398,800, up 0.3% from February 2025 and a record high for the month of February.”
Nancy Vanden Houten, lead US economist at Oxford Economics, described the February reading as “a touch stronger than expected” and said sales would gradually improve this year, provided the US/Israel war with Iran does not last long enough to drive interest rates higher or weaken the labor market.
She said that if mortgage rates stay near current levels, more sellers are likely to return to the market as the spring selling season move into full swing.
Vanden Houten added that home prices were little changed in February and that she expects home price growth “to remain positive at the national level, but home price trends continue to diverge across regions.”
Month over month, sales fell 6.0% in the Northeast while edging higher in the Midwest (up 1.1%), South (up 1.6%) and West (up 8.2%). Year on year, only the South registered an increase, up 0.5%.
Median prices ranged from $302,100 in the Midwest to $603,100 in the West, where prices actually dipped 1.9% from a year earlier.
Why borrowers still hesitated
The average 30‑year fixed rate in February hovered around 6.05%, down from 6.84% a year earlier. Yet both NAR and market analysts pointed to lingering headwinds.
“Homeowners aren’t eager to move,” Ostrowski said.
“The mortgage rate lock‑in effect remained in place, and soft prices in the Sun Belt have discouraged sellers from pulling their homes off the market. And first‑time buyers aren’t feeling motivated to jump in.”
“The job market has slowed and affordability remains a challenge, especially for first‑time buyers,” he said. “Mortgage rates are at their lowest levels since 2022, which you’d think would motivate potential buyers. That hasn’t happened yet.”
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