By Mary Prenon
U.S. existing home sales saw a 1.7 percent month-over-month increase in February to a seasonally adjusted annual rate of 4.09 million units. While sales of year-over-year existing homes fell by 1.4 percent, the National Association of Realtors (NAR) remains cautiously optimistic about the upcoming spring market.
The month-over-month increase exceeded the market estimate, which had projected a decline to 3.89 million.
“Housing affordability is improving, and consumers are responding,” NAR Chief Economist Lawrence Yun said in the firm’s March 10 report.
“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.”
NAR’s Housing Affordability Index indicates that affordability improved for the eighth consecutive month, rising from 117.1 in January to 117.6 in February. This represents a significant increase from a year earlier, when the index stood at 103.1, and marks the highest level since March 2022.
According to NAR, its Housing Affordability Index measures whether a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels, based on the most recent price and income data. A number above 100 indicates the typical family has more income than required to qualify.
Bankrate housing market analyst Jeff Ostrowski pointed out in a note sent to The Epoch Times that January’s existing-home sales number had been revised upward from 3.91 million to 4.02 million units. Coupled with February’s better-than-expected result, the winter market “wasn’t as frozen as initially thought,” he said.
He also mentioned that February’s sales number is still far below pre-pandemic levels.
“For context, during the pandemic, home sales were well above 6 million a year, and a typical year before the pandemic saw more than 5 million sales,” he said.
NAR listed February’s national median price for all housing types at $398,000, a slight increase of 0.3 percent year over year, and the 32nd consecutive month of year-over-year price hikes. The median price for single-family homes came in at $401,800—up by 0.2 percent from a year earlier. Condos and co-ops saw a 0.9 percent increase to $358,100.
“Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains,” Yun said. “Wage growth is now outpacing home price growth by almost four percentage points. Mortgage rates are also measurably lower compared to a year ago.”
Ostrowski noted that while mortgage rates have come down, many homeowners are still not ready to move.
“The mortgage rate lock-in effect remains 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,” he said.
As of March 5, Freddie Mac reported the average rate for a 30-year fixed-rate mortgage at 6 percent and 5.43 percent for a fixed-rate 15-year mortgage.
Regionally, the Midwest, West, and South experienced month-over-month sales growth, while sales declined in the Northeast. An analysis of year-over-year sales shows only the South gaining sales, while Northeast, Midwest and West sales decreased.
The West held the highest median price at $603,000, a 1.9 percent decline from last February. Median home prices in the Northeast grew 3.3 percent from last year to $479,800. The South saw a mild increase of 0.2 percent, with the February median at $356,800, and the Midwest offered the lowest median price at $302,100—a 2.3 percent rise from last year.
“The job market has slowed and affordability remains a challenge, especially for first-time buyers,” Ostrowski said. “Mortgage rates are at their lowest levels since 2022, which you’d think would motivate potential buyers. That hasn’t happened yet.”
Yun noted that inventory continues to grow at a slow pace.
“If demand picks up notably in the coming months and outpaces supply growth, home prices will inevitably rise,” he said. “That is why increasing supply is so important to help limit home price growth, improve housing affordability, and boost transactions.”
Last month’s inventory measured 1.29 million housing units—an uptick of 2.4 percent from January and 4.9 percent from February 2025. Last month recorded a 3.8-month supply of unsold inventory, an advance from 3.6 months from a year ago.
Homes are spending a bit more time on the market now as well, with the median at 47 days, as compared to 46 days last month and 42 days in February 2025. Just 34 percent of sales were first-time buyers, and 31 percent of all transactions were cash sales.
