The housing market has seen a significant surge in sales in February, with existing home sales jumping 9.5% to 4.38 million units, according to the National Association of Realtors. This unexpected increase has caught many housing analysts off guard, who were anticipating a slight drop.
While sales were down 3.3% year over year, it was the largest monthly gain since February 2023. The West and South regions saw the biggest increase in sales, with the West seeing a 19.4% surge and the South experiencing a 16.4% jump. Sales in the Northeast, however, remained unchanged.
Lawrence Yun, NAR’s chief economist, attributes this surge in sales to additional housing supply meeting market demand. He notes that housing demand has been steadily rising due to population and job growth, and the timing of purchases will depend on mortgage rates and inventory choices.
Inventory levels rose 10.3% year over year to 1.07 million homes for sale at the end of February, representing a still low 2.9-month supply at the current sales pace. The median price also saw an uptick, rising 5.7% to $384,500, marking the eighth straight month of annual gains. Competition was fierce, with 20% of homes selling above list price.
First-time buyers, however, did not see a surge in February, representing just 26% of buyers, down from 28% in January. Yun speculates that factors like the stock market and record-high home prices may be driving people from expensive states to more affordable markets, resulting in more all-cash sales.
Overall, the housing market continues to see strong demand, with consumers potentially accepting a “new normal” for mortgage rates. Stay tuned for more updates on the latest housing market trends and news.
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