Existing home sales improved in February compared with January, but the market continued to lag behind last year as buyers worked through affordability limits, the National Association of Realtors said. Sales rose to an annual pace of 4.09 million units after a weak start to the year, as home shoppers seized on easing mortgage rates heading into the spring homebuying season. Even with the rebound, the February reading remained below the pace recorded in the same month of 2025.
NAR reported that existing home sales increased 1.7% from January to a seasonally adjusted annual rate of 4.09 million units. The association also said sales were down 1.4% from February 2025, and that every region except the South saw lower sales versus the prior year. The latest sales figure was above the 3.84 million-unit pace that economists were expecting, according to FactSet, in the report shared with readers.
Lawrence Yun, NAR’s chief economist, said on a conference call that the market showed “Good momentum, but nonetheless sales are still below one year ago.” He said the latest trends followed a particularly weak January that NAR described as its biggest monthly decline in nearly four years. In that context, NAR said January’s sales data was revised modestly higher after the original release.
Home prices continued to rise even as sales remained constrained. NAR said the national median sales price increased 0.3% year over year in February to $398,000, which it described as an all-time high for any February in data going back to 1999. NAR also said home prices have risen on an annual basis for 32 months in a row.
First-time buyers were among those taking advantage of easing financing costs in February, Yun said. He said first-time buyers made up 34% of all home purchases, matching what he described as the highest level in the last five years. Yun’s comments came as the report connected February activity to lower mortgage rates, even though other economic uncertainty continued to affect consumer demand.
The report tied mortgage-rate conditions to recent market moves. It said the average rate on a 30-year mortgage dropped to just under 6% for the first time since late 2022, citing Freddie Mac, and referenced that the decline had boosted purchasing power for some home shoppers. It also noted, however, that mortgage rates later climbed after a spike in oil prices linked to the Iran war, raising the possibility of higher borrowing costs as spring buying gets underway.
Lisa Sturtevant, chief economist at Bright MLS, said in an email that “Despite mortgage rates falling below 6% briefly, international conflict has sent them higher in recent days.” She added that if the conflict with Iran was limited, “the housing market could rebound quickly,” but that “a prolonged conflict could stall home sales activity this spring.”
Affordability remained a challenge, especially for buyers without equity, the report said. It also pointed to uncertainty about the economy and a job market increasingly showing signs of strain as factors keeping some would-be buyers on the sidelines. For buyers who could move, the report said more properties were available, though supply stayed below historical norms.
NAR said there were 1.29 million unsold homes at the end of February, up 2.4% from January and up 4.9% from February 2025. The report also said the inventory translated to a 3.8-month supply at the current sales pace, while noting that a 5-to-6-month supply is traditionally viewed as balanced between buyers and sellers. Yun said, in response, that the market “really do need more inventory to show up,” warning that without an improvement come spring, additional buyer activity could push prices higher.