US home sales surged last month despite highest February prices on record

Washington, DC
CNN
 — 

Gross sales of beforehand owned properties within the US unexpectedly soared in February to the best stage in a 12 months, regardless of surging mortgage rates that month, in an indication that patrons are returning to the market.

Current house gross sales — which make up many of the housing market and embody single-family properties, townhomes, condominiums and co-ops — rose 9.5% in February from the prior month to a seasonally adjusted annualized fee of 4.38 million models, the Nationwide Affiliation of Realtors reported Thursday. That was the second straight month of rising gross sales and the most important month-to-month enhance since February 2023, in keeping with a launch.

Dwelling gross sales have rebounded since dropping to the bottom ranges in a long time final fall as mortgage charges shot up.

In the meantime, the median nationwide worth of an current house rose 5.7% in February from a 12 months earlier, to $384,500, an even bigger annual rise than within the prior month. It was the best median house worth for any February on file.

“Extra housing provide helps to fulfill market demand,” mentioned Lawrence Yun, NAR’s chief economist, in a launch. “Housing demand has been on a gentle rise as a consequence of inhabitants and job progress, although the precise timing of purchases will likely be decided by prevailing mortgage charges and wider stock selections.”

A serious driver for final month’s leap in gross sales was a pointy enhance within the variety of properties that got here to market.

Complete housing stock rose 5.9% in February from the prior month, to 1.07 million models. From a 12 months in the past, stock was up 10.3% final month, giving patrons extra selection and easing the strain of a traditionally tight market.

A rebound in stock has lengthy been overdue, Yun mentioned in a convention name with reporters, as some Individuals lastly start to surrender their coveted low mortgage charges.

“What occurred up to now two years after we had a traditionally low stock stage is that many individuals who would have moved in regular circumstances simply delayed,” Yun mentioned. “They mentioned ‘I’ve my 3% mortgage fee, I don’t wish to give it up,’ so many individuals merely delayed. However they’ll not delay.”

Owners who need or want to maneuver for varied causes akin to a wedding, divorce or new youngsters are contending with the truth that mortgage charges usually are not more likely to fall to the ultra-low ranges that existed earlier than the Federal Reserve started to boost rates of interest in 2022, Yun mentioned.

The 30-year fixed-rate mortgage averaged 6.74% in the week ending March 14, in keeping with knowledge from Freddie Mac. That’s down from 7.79% in late October, the best in 20 years, however above something seen from 2008 to 2022. Economists don’t anticipate mortgage charges to fall beneath 6% this 12 months.

Freddie Mac releases new mortgage fee knowledge for the week ending March 21 later Thursday.