Existing-home sales, including single-family homes, townhomes, condos and co-ops, increased 1.7% month over month in February, but were down 1.4% from a year earlier, according to the National Association of Realtors.
NAR chief economist Lawrence Yun said affordability is improving as mortgage rates move lower and price growth slows. NAR said the drop in mortgage rates from about 7% at the start of 2025 to around 6% recently could save buyers about $2,000 per year through lower monthly payments.
NAR said a 1% decline in mortgage rates means an additional 5.5 million households can qualify for a mortgage, including 1.6 million renters who could potentially become first-time buyers. First-time buyers accounted for 34% of February sales, up from 31% a year earlier.
Yun said the market remains below pre-pandemic activity, citing more than 6 million more jobs than in 2019 while annual home sales are down by 1 million. He said demand is muted relative to wage growth and job growth, and noted wage growth is outpacing home-price growth by nearly 4 percentage points.
Thirty-year fixed-rate mortgages averaged 6.05% in February, down from 6.84% a year earlier, and averaged about 6% last week. Inventory rose 2.4% from January and about 5% from a year earlier.
The median existing-home price was $398,000 in February, up 0.3% from a year earlier. The median price for single-family homes was $401,800, up 0.2%, and the median price for condos and co-ops was $358,100, up 0.9%.
NAR’s Housing Affordability Index showed gains across all regions, with affordability up 10% in the Northeast, 11.7% in the Midwest, 14.1% in the South, and 17% in the West. Existing-home sales fell 6% in the Northeast to an annual rate of 470,000, rose 1.1% in the Midwest to 940,000, rose 1.6% in the South to 1.89 million, and surged 8.2% in the West to 790,000.
Median prices were $479,800 in the Northeast, up 3.3% from a year earlier, $302,100 in the Midwest, up 2.3%, $356,800 in the South, up 0.2%, and $603,100 in the West, down 1.9%.
In market conditions, 14% of homes sold above asking price in February, down from 21% a year earlier, and the median time on market was 47 days, up from 42 days a year earlier. All-cash buyers accounted for 31% of February transactions, up from 27% in January, while foreclosures and short sales comprised 3% of sales, up from 2% in January and unchanged from a year earlier.