Existing-home sales increased 4.2% in February compared with January to a seasonally adjusted annual rate of 4.26 million, according to the National Association of Realtors (NAR).
Year-over-year, however, sales were down 1.2%.
Regionally, and month-over-month, existing-home sales were down 2.0% in the Northeast, flat in the Midwest, up 4.4% in the South, and up 13.3% in the West.
The median existing-home sales price was $398,400 in February, an increase of 3.8% from February 2024.
February marked the 20th consecutive month of year-over-year home price increases, NAR says.
The inventory of unsold existing homes climbed 5.1% from the prior month to 1.24 million – about a 3.5-month supply at the current sales pace.
NAR includes sales of existing townhomes, condominiums and co-ops in with its results.
“Home buyers are slowly entering the market,” says Lawrence Yun, chief economist for NAR, in a statement. “Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”
“On a technical note, raw sales in February were down 5.2 percent from last year, which was a leap year with one extra day of business,” Yun says. “However, after adjusting for this effect, combined with the winter seasonal factors, the momentum for home sales is flashing encouraging signs.”
“Each one percentage point gain in home price translates into an approximately $350 billion increase in housing equity for American property owners,” Yun adds. “That means a gain of nearly $1.3 trillion in home value appreciation at a time when the current stock market is undergoing a correction. Moreover, the ongoing housing shortage, coupled with historically low mortgage default rates, implies a solid foundation for home values.”
Cash sales accounted for 32% of transactions in February, up from 29% in January but down from 33% in February 2024.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in February, down from 17% in January and 21% from February 2024.
Distressed sales – foreclosures and short sales – represented 3% of sales in February, unchanged from January and the previous year.
Photo: Blake Wheeler