Existing-Home Sales Jump in February, Grow 9.5%

Key takeaways:

• February existing-home sales increased 9.5% month-over-month, while declining 3.3% annually
• The nationwide median existing-home sales price hit $384,500 in February — rises of 1.4% from January and 5.7% from the previous year
• Sellers still have the market advantage in regards to inventory, but unsold existing homes grew 5.9% month-over-month to a 2.9-month supply

Existing home sales tick up in 2024

Existing-home sales increased 9.5% in February compared to the previous month, according to the National Association of Realtors (NAR). However, the metric dropped 3.3% year-over-year.

Meanwhile, the median existing-home sales price reached $384,500. That rose 1.4% from January’s $379,100 and 5.7% annually from $363,600.

“Additional housing supply is helping to satisfy market demand,” said NAR Chief Economist Lawrence Yun. “Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”

Regionally, the South had the most existing-home sales in February, with an annual rate of 2.02 million units. That shot up 9.8% from January while it trailed February 2023 by 2.9%. The median price grew 4.1% annually to reach $354,200.

The West’s 850,000 existing sales saw the largest growth, expanding 16.4% monthly while declining 1.2% yearly. Typically the costliest part of the country, the median price increased annually by 9.1% to $593,000.

The Midwest’s 1.03 million units was good for a 8.4% bump month-over-month but dropped 3.7% year-over-year. Its median price rose 6.8% to $277,600.

The Northeast’s 480,000 sales held steady from January but dipped 7.7% From February 2023. The median price, however, jumped 11.5% from the previous year to $420,600.

Factors influencing the market

NAR Chief Economist Lawrence Yun has pointed to two significant factors impacting existing-home sales: low for-sale inventory and high mortgage rates.

Given the ongoing lack of supply, properties on the market still receive multiple offers, especially starter- and mid-priced homes, he said. Although we saw plenty of interest rate growth in 2023, the average 30-year fixed rate mortgage (FRM) came down every month from October 2023 to January 2024 before stepping up in February. With inflation dissipating, it’s possible the recent interest rate descension is a harbinger of things to come.

“Existing home sales will continue to be constrained in the foreseeable future as the supply of homes remains tight and sellers continue to wait for lower mortgage rates,” said CoreLogic Chief Economist Dr. Selma Hepp. “All eyes are on the Fed now to cut rates this summer in order to provide relief to the buyers as well as stubborn sellers. Should they do so, existing home sales should expect a better outlook for the remainder of the year.”

Other notable data from the report showed February’s housing inventory hit 1.07 million units, a 2.9-months supply at the current pace of sales. The total represents a 5.9% increase month-over-month and 10.3% year-over-year. The months-supply edged down from January’s 3.0 months and inched up from February 2023’s 2.6 months. Traditionally, six months worth of inventory defines a balanced housing market.

Additionally, time on market stretched to 38 days in February, up from 36 in January and 34 the year prior. All-cash buyers accounted for 33% of existing home sales for the month, up from 32% in January and 28% year-over-year.

Navigating the housing market

Embarking on the journey to homeownership is an exciting and significant step in one’s life. To help you navigate this path successfully, we’ve compiled three practical tips:

1. Stay on top of housing inventory: Keep an eye on changes in inventory levels, as this can impact your choices and negotiation power. Be ready to act when the right opportunity arises.
2. Assess your budget and financing options: With low housing affordability being a factor in declining sales, it’s crucial to evaluate your financial circumstances. Explore different financing options and ensure that you find a home that aligns with your budget and long-term financial goals.
3. Be proactive and act quickly: When you find a home that meets your criteria, be proactive and act quickly to avoid missing out. The best way to do so is by securing a mortgage prequalification in advance.

The bottom line

As a homebuyer, navigating the current real estate market can feel overwhelming at times. But armed with the right knowledge, you can approach the process with confidence.

Stay informed about the latest trends, assess your budget, explore down payment assistance programs in your area, and act quickly when you find the right home.