U.S. existing-home sales bounced up in February after a weak January, as homebuyers moved in when mortgage rates eased, according to the National Association of Realtors. The February increase raised sales to a seasonally adjusted annual rate of 4.09 million units, up 1.7% from January. Still, the NAR said sales were 1.4% lower than they were in February 2025, leaving the market below the prior year’s level even with the month-to-month improvement. (Sources: src_001)
Speaking during a conference call, Lawrence Yun, the NAR’s chief economist, described the trend as constructive but incomplete. “Good momentum, but nonetheless sales are still below one year ago,” Yun said. The AP report linked the improvement to buyer responsiveness to easing financing costs as the spring homebuying season approached. (Sources: src_001)
Home prices continued to rise, but the pace moderated. The NAR said the national median sales price increased 0.3% from a year earlier in February to $398,000, which it described as an all-time high for any February in data going back to 1999. The report also said home prices have been higher year over year for 32 months in a row. (Sources: src_001)
The AP report positioned the February results as the latest chapter in a housing-market slump that has stretched since 2022, when mortgage rates rose from pandemic-era lows. Existing home sales were described as stuck last year at 30-year lows, with sales hovering close to a 4-million annual pace through 2023 rather than the roughly 5.2-million annual pace that historically has been the norm. (Sources: src_001)
A separate factor cited for February’s partial pickup was mortgage pricing. Freddie Mac said the average rate on a 30-year mortgage dropped to just under 6% for the first time since late 2022 two weeks earlier, supporting purchasing power for buyers who can qualify at current rates. The report also said first-time buyers made up 34% of all home purchases in February, matching the highest level in the last five years. (Sources: src_001)
At the same time, the AP report said a turnaround could be challenged by rising borrowing costs tied to broader economic and geopolitical signals. It noted that the 10-year Treasury yield, which lenders use to price home loans, climbed after a spike in oil prices since the Iran war started, a dynamic that could lead to higher mortgage rates just as spring buying begins. Lisa Sturtevant, Bright MLS’s chief economist, said in an email that rates had moved higher despite falling below 6% briefly and warned that a prolonged conflict could stall spring sales activity. (Sources: src_001)
The inventory backdrop remained tight, limiting options for buyers even as activity improved. The NAR said there were 1.29 million unsold homes at the end of February, up 2.4% from January and up 4.9% from a year earlier, but still below what it described as roughly 2 million homes that was typical before the COVID-19 pandemic. With that month-end inventory, the report said supply equaled a 3.8-month supply at the current sales pace, while it noted a 5- to 6-month supply is typically considered balanced between buyers and sellers. (Sources: src_001)
Yun said sellers and buyers alike could be watching for more inventory to appear. “We really do need more inventory to show up,” Yun said, noting that if it does not improve come spring—and if more buyers enter the market—it could push up home prices. The AP report also said affordability remains a challenge, particularly for first-time buyers who lack equity, and that uncertainty about the economy and signs of strain in the job market could keep would-be buyers on the sidelines. (Sources: src_001)