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Existing-home sales rose in February 2024, rebounding from a sluggish January as significant gains in the South and West offset flat or declining activity in other regions. The national median sales price increased for the 20th consecutive month, reaching $398,400, underscoring a market characterized by pent-up demand, moderating mortgage rates, and a slowly improving supply of homes for sale. This analysis breaks down the key trends and what they mean for buyers and sellers.
What Were the Key Numbers for Existing-Home Sales in February?
According to the National Association of Realtors® (NAR), existing-home sales rose 4.2% from January to a seasonally adjusted annual rate of 4.26 million units. However, sales were still down 1.2% compared to February 2023. The monthly growth was entirely driven by regional disparities: sales surged 13.3% in the West and gained 4.4% in the South, while the Midwest saw no change and the Northeast experienced a 2% decline. This rebound followed a particularly weak January, which industry assessments suggest was impacted by severe winter weather that delayed transactions.
How Did Home Prices and Inventory Change?
The median existing-home price climbed 3.8% year-over-year to $398,400. This figure is 47% higher than in February 2020, just before the COVID-19 pandemic. For buyers, a critical metric is housing inventory, which showed positive signs. The total supply of unsold homes at the end of February was 1.24 million units, up 5.1% from January and a significant 17% from a year ago. Based on the current sales pace, this represents a 3.5-month supply of homes on the market. For context, economists generally consider a six-month supply to indicate a balanced market between buyers and sellers.
| Metric | February 2024 Value | Change from January | Change from February 2023 |
|---|---|---|---|
| Sales Pace (SAAR) | 4.26 million | +4.2% | -1.2% |
| Median Sales Price | $398,400 | N/A | +3.8% |
| Inventory (Units) | 1.24 million | +5.1% | +17.0% |
| Months' Supply | 3.5 months | Unchanged | Up from 3.0 months |
SAAR: Seasonally Adjusted Annual Rate. Data Source: National Association of Realtors®.
What Role Did Mortgage Rates Play in the February Market?
The sales activity in February reflects mortgage rate conditions from January, when most of these purchases would have gone under contract. In January, Freddie Mac reported the average rate on a 30-year fixed-rate mortgage was 6.96%, its highest level since the previous May. Despite this expensive borrowing environment, demand persisted. By mid-March, rates had drifted down to 6.65%, offering some potential relief. As NAR Chief Economist Lawrence Yun noted, "To truly get a sustained increase in home sales, we do need lower mortgage rates." The market's trajectory continues to hinge on the direction of borrowing costs.
What Is the Outlook for the Spring Homebuying Season?
The spring market is expected to see increased activity, primarily due to a greater selection of homes. “In the spring and summer months, we will have more inventory so as an average consumer... they will actually see more inventory,” Yun stated. However, sales activity is predicted to remain weak by historical standards for the first half of the year. The market's health will depend on a combination of factors: the pace of inventory growth, the trajectory of mortgage rates, and broader economic conditions.
For buyers, the current environment suggests that while choices are improving, affordability challenges persist. For sellers, increased inventory means more competition, necessitating strategic pricing. Based on industry assessment, the key to navigating the 2024 market is patience and preparation, with a close watch on weekly mortgage rate movements and new listing data.
