Existing-Home Sales Show Modest Growth
Recent housing data indicates that existing-home sales across the United States experienced a slight increase in February. Sales rose 1.7% compared to the previous month, reaching a seasonally adjusted annual pace of approximately 4.09 million homes.
While the monthly increase signals some stability in the housing market, overall activity remains slightly below last year’s levels. Compared to February of the previous year, total existing-home sales declined by about 1.4%.
Despite this modest change, the latest figures suggest that improving affordability and easing mortgage rates may gradually support buyer activity.
Housing Affordability Continues to Improve
One of the most encouraging trends in the housing market is the steady improvement in affordability. The Housing Affordability Index has now increased for eight consecutive months.
In February, the index rose to 117.6, compared with 117.1 in January and 103.1 one year earlier. This marks the strongest affordability level since early 2022.
Higher wage growth combined with slightly lower mortgage rates has helped boost purchasing power for many households. In fact, income growth is currently outpacing home price growth, which is helping to offset the impact of higher housing costs.
Even with these improvements, housing activity has not fully returned to pre-pandemic levels, indicating that the market is still adjusting after several years of rapid price growth and rising borrowing costs.
Inventory Is Slowly Increasing
Housing supply is gradually expanding, although inventory growth remains relatively modest.
Total available housing inventory reached 1.29 million homes in February, representing:
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a 2.4% increase from January, and
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a 4.9% increase compared to the same month last year.
At the current pace of sales, this represents a 3.8-month supply of homes, slightly higher than the 3.6-month supply recorded a year earlier.
Increasing inventory can help balance supply and demand, which may slow the pace of price increases and provide buyers with more options.
Home Prices Continue to Rise
Even as inventory improves, home prices remain relatively stable with continued upward pressure.
The median price for existing homes nationwide reached $398,000 in February, representing a 0.3% increase compared with the previous year.
This marks 32 consecutive months of annual price growth, highlighting the ongoing supply constraints that still affect the housing market.
Price trends vary by property type:
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Single-family homes: Median price of $401,800, up slightly from last year.
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Condos and co-ops: Median price of $358,100, with a slightly larger annual increase.
Regional Housing Market Trends
Real estate activity varied significantly across different regions of the country.
Northeast
Sales declined both month-over-month and year-over-year, though prices continued to rise. The median home price in the region reached approximately $479,800.
Midwest
Sales increased modestly compared to January but remained lower than a year ago. The median price reached about $302,100, reflecting steady growth.
South
The South was the only region to experience a year-over-year increase in home sales. The median home price was approximately $356,800, with slight annual appreciation.
West
The West posted the strongest monthly improvement in sales activity. However, prices in the region declined slightly compared with the previous year, with a median price of about $603,100.
First-Time Buyers Are Returning to the Market
Another positive development is the increase in first-time homebuyers entering the market.
First-time buyers accounted for 34% of transactions in February, up from 31% the previous month.
Meanwhile:
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31% of purchases were all-cash transactions
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16% involved investors or second-home buyers
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3% of sales were distressed properties, including foreclosures or short sales
These numbers suggest that while investors remain active, traditional homebuyers are gradually becoming more prominent in the market.
Homes Are Staying on the Market Slightly Longer
The average time homes spent on the market increased slightly in February.
Properties typically remained listed for 47 days, compared with 46 days the previous month and 42 days during the same period last year.
This indicates a somewhat more balanced market compared with the fast-paced conditions seen during the housing boom.
Mortgage Rates Provide Some Relief
Mortgage rates have also helped support housing affordability.
The average 30-year fixed mortgage rate was approximately 6.05% in February, slightly lower than the previous month and significantly below the 6.84% average seen one year earlier.
Lower borrowing costs can improve buyer purchasing power and may encourage more households to enter the housing market in the coming months.
What This Means for Buyers and Sellers
The latest housing data suggests the market is moving toward greater balance.
Key trends shaping the real estate market include:
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improving affordability
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gradually increasing housing supply
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moderating mortgage rates
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steady, though slower, price growth
For buyers, improved affordability and growing inventory may create more opportunities. For sellers, limited supply continues to support home values, though pricing strategy and market conditions remain important factors.
As the year progresses, the pace of job growth, inflation trends, and interest rates will likely continue to influence the direction of the housing market.
