- Home sales surged 9.5% from January to February, marking the largest monthly gain in a year. The median home price increased 5.7% year-over-year.
- Inventory rose 5.9% from last year, helping to meet market demand. However, first-time buyers lagged, making up just 26% of February buyers.
- All-cash sales accounted for 33% of transactions, up from 28% a year earlier, possibly due to buyers relocating from expensive states.
February home sales surged 9.5% from January to 4.38 million units on a seasonally adjusted annualized basis according to the National Association of Realtors. Housing analysts had been expecting a slight drop. The jump in sales was the largest monthly gain since February 2023.
Higher Demand Drives Prices Up
The median home price increased 5.7% year-over-year to $384,500, marking the eighth straight month of annual gains. Competition remained fierce, with 20% of homes selling above list price.
More Inventory Coming to Market
Inventory rose 5.9% from last year to 1.07 million homes for sale at the end of February. This represents a still-low 2.9-month supply at the current sales pace. Additional housing supply is helping meet market demand, said Lawrence Yun, NAR’s chief economist.
First-Time Buyers Lagging
First-time buyers did not surge with overall sales. They represented just 26% of February buyers, down from 28% in January. The historical norm is around 40%.
All-Cash Sales on the Rise
All-cash sales accounted for 33% of transactions, up from 28% a year earlier. This may be helped by record-high prices prompting buyers from expensive states to relocate and pay all cash.
Sales Count Reflects December, January Mortgage Rates
The February sales tally reflects contracts likely signed in December and January when rates dropped to the mid 6% range before rising back above 7%. Consumers may be accepting higher rates as the new normal, said Yun.
