U.S. Existing-Home Sales Rise as Affordability Improves
Sales of previously owned U.S. homes unexpectedly increased in February, and the prior month was revised higher, helped by a decline in mortgage rates and modest growth in asking prices.
Contract closings rose 1.7% to an annualized 4.09 million pace, according to National Association of Realtors (NAR) data released Tuesday. The pace beat nearly all estimates in a Bloomberg survey of economists, signaling demand is holding up as financing conditions ease.
A key bright spot is improving affordability. With mortgage rates receding and price growth moderating, NAR’s monthly housing affordability index—based on home prices, median income and borrowing costs—posted its most favorable reading since 2022. “Housing affordability is improving, and consumers are responding,” NAR Chief Economist Lawrence Yun said, while noting the market still has a long way to go to return to pre-pandemic transaction levels.
The report showed the median selling price rose just 0.3% from a year earlier—one of the smallest increases since the pandemic-era housing frenzy—to $398,000. Inventory also improved: the supply of existing homes climbed 4.9% from a year earlier to 1.29 million, the highest for any February since 2020.
Contract signings rose in three of four regions, led by an 8%+ jump in the West to a one-year high. Sales increased 1.6% in the South and edged up in the Midwest, but fell in the Northeast to the lowest level since 2024.
First-time buyers accounted for 34% of purchases in February, up from 31% in the prior month and a year earlier. Yun said the pickup suggests first-time buyers are increasingly taking advantage of better affordability.
Looking ahead, analysts expect home sales to rise this year, though forecasts vary widely. Mortgage rates fell late last month to 6.09%, the lowest since 2022. President Donald Trump has asked Fannie Mae and Freddie Mac to purchase $200 billion of mortgage-backed securities to help reduce home-financing costs, and his administration is pursuing additional initiatives as affordability becomes a central political issue ahead of the midterm elections. Trump has also urged Congress to bar institutional investors from buying single-family homes.
Source : Newsmaker.id
