Existing Home Sales Rise as Sellers Return to Market

Existing home sales increased in February, coinciding with a notable trend of sellers returning properties to the market. While inventory remains below pre-pandemic levels, data shows a modest rise in available homes and a slight increase in median prices.

Recent Sales and Market Activity

According to the National Association of Realtors (NAR), sales of previously owned homes rose 1.7% in February from January, reaching a seasonally adjusted annual rate of 4.09 million units. This figure represents a 1.4% decrease from February of the previous year. The sales activity in February likely resulted from purchase agreements made in December and January, when mortgage rates were lower.

• The median existing-home sales price in February was $398,000, a 0.3% increase from the same month last year.
• Properties priced at $1 million or more saw the strongest sales activity, while sales declined in the lowest price segments.
• The typical home remained on the market for 47 days in February, compared to 42 days a year earlier.

Inventory and Seller Activity

The total inventory of unsold existing homes at the end of February was 1.29 million units, a 2.4% increase from January and a 4.9% increase from February 2023. This represents a 3.8-month supply at the current sales pace, which is unchanged from January. A six-month supply is typically considered a balanced market.

Data from Realtor.com indicates that while the national inventory of homes for sale is higher than a year ago, the rate of increase has slowed for nine consecutive months. Active listings increased by 7.9% year-over-year in February, but overall listings remain 17% below 2019 levels.

A separate trend shows sellers re-entering the market. Real estate brokerage Redfin reported that nearly 45,000 homes that were delisted in the fall of 2023 were relisted for sale in January 2024. This is the highest January total for relisted homes in the decade Redfin has tracked the metric, accounting for 3.6% of homes on the market that month.

Regional and Economic Factors

NAR Chief Economist Lawrence Yun noted that while sales increased, housing demand remains subdued relative to wage growth and job increases. He stated that increasing housing supply is crucial for limiting home price growth and improving affordability.

Realtor.com's chief economist, Danielle Hale, reported that inventory improvements have been primarily observed in the South and West regions of the U.S., particularly for homes priced below $500,000. The Northeast and Midwest continue to experience significant undersupply.

Market Participants

First-time buyers were responsible for 34% of sales in February, up from 31% a year ago. Investors, who purchase with cash, accounted for 16% of sales, unchanged from the previous year.