The U.S. housing market saw a significant boost in February, with existing-home sales climbing 4.2% from the previous month, according to the National Association of Realtors® (NAR). This surge signals a potential release of pent-up demand, despite persistent mortgage rate challenges.
Key Market Indicators:
- Sales Increase: Existing-home sales reached a seasonally adjusted annual rate of 4.26 million in February.
- Price Appreciation: The median existing-home sales price rose 3.8% year-over-year to $398,400, marking the 20th consecutive month of price increases.
- Inventory Growth: The inventory of unsold existing homes increased 5.1% from January to 1.24 million units, representing a 3.5-month supply.
“Home buyers are slowly entering the market,” said NAR Chief Economist Lawrence Yun. “Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”
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While year-over-year sales slipped slightly by 1.2%, the monthly surge indicates a positive shift in market momentum. Yun also pointed out that after adjusting for leap year effects and seasonal factors, the outlook for home sales is promising.
The increase in home prices is translating to significant gains in housing equity for homeowners. “Each one percentage point gain in home price translates into an approximately $350 billion increase in housing equity for American property owners,” Yun stated.
Regional Performance:
- The West experienced the most significant sales jump, with a 13.3% increase.
- The South also saw a notable rise of 4.4%.
- The Midwest sales remained stable.
- The Northeast saw a slight decrease in sales.
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Other Notable Trends:
- First-time buyers accounted for 31% of sales, up from previous months.
- Cash sales represented 32% of transactions.
- The average 30-year fixed-rate mortgage was 6.65% as of March 13th.
The increase in inventory and the continued price appreciation are key factors influencing the current market. As the spring buying season begins, these trends will be closely watched by both buyers and sellers.
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