February saw a significant 4.2% increase in previously owned home sales compared to January, reaching 4.26 million units on an annualized basis, according to the National Association of Realtors. Analysts had anticipated a 3% decline. Sales were 1.2% lower than in February of the previous year. This data reflects closings based on contracts signed in December and January when mortgage rates were near 7% for 30-year fixed loans; rates are now in the high 6% range. NAR Chief Economist Lawrence Yun stated that more inventory is helping release pent-up housing demand despite stable mortgage rates. Annual sales increased only in the highest price categories, above $750,000, while median-priced home sales dropped 3% year-over-year. Inventory rose 17% year-over-year to 1.24 million units but remains tight at a 3.5-month supply. Prices continue to rise, with the median home price hitting $398,400, a 3.8% increase from the prior year and a February record high. First-time buyers accounted for 31% of February sales, up from 26% the previous year, while investor activity decreased. Cash sales remained steady at 32% of transactions, suggesting more owner-occupants are using cash. Despite the higher-than-expected sales, real estate agents report a weaker-than-normal resale market this spring due to affordability issues and economic uncertainty. — news from CNBC
