Housing News

More Buyers Snapped Up Existing Homes in February

In an encouraging start to the spring housing market, more buyers are snapping up existing homes.

Existing home sales rose 4.2% in February compared to a month earlier, according to a report from the National Association of Realtors (NAR). (Existing homes are previously lived-in residences and do not include new construction.)

However, the number of sales dipped 1.2% from February of last year.

“Home buyers are slowly entering the market,” said NAR Chief Economist Lawrence Yun in a statement. “Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”

Buyers are facing a mixed housing market.

On one hand, there were 17% more homes on the market in February than there were at the same time last year, according to the NAR report. There were 5.1% more homes for buyers to choose from than in January.

Homes also stayed on the market a little longer, 42 days compared to 38 days a year ago.

That gives buyers more choices—and negotiating power.

“The momentum for home sales is flashing encouraging signs,” Yun said.

However, home prices continued to climb. They jumped 3.8% year-over-year in February to a median $398,400. This was the 20^th month in a row of higher prices.

Mortgage rates also remain elevated, averaging 6.67% for 30-year, fixed-rate loans in the week ending March 20, according to Freddie Mac data. That was lower than last year, when they averaged 6.87%.

"The 30-year fixed-rate mortgage has stayed under 7% for nine consecutive weeks, which is helpful for potential buyers and sellers alike,” said Freddie Mac Chief Economist Sam Khater in a statement.

Who’s buying homes?

That didn’t seem to discourage first-time buyers from entering the market. They purchased almost a third, 31%, of all homes in February—up from 26% a year earlier.

Cash buyers made up nearly another third of purchases, buying 32% of homes. That was roughly flat compared to the previous February, when these buyers purchased 33% of homes.

Where home prices rose the most

Home prices surged in the Northeast. They shot up 10.4% year-over-year in February to a median $464,300. Existing home sales also rose 4.2% annually.

Prices also increased in the Midwest, going up 5.8% year-over-year to $295,500 in February. Sales ticked up 1% annually.

In the West, prices bumped up 3.6% year-over-year to $614,600. Sales were the same as the previous year.

And in the South, prices edged up 1.9% to $358,800. Sales slipped 4% year-over-year.