Present house gross sales in February elevated to the second highest degree since March 2024, in line with the Nationwide Affiliation of Realtors (NAR). This rebound suggests consumers are slowly coming into the market as stock improves and mortgage charges decline from current excessive in January. Regardless of charges easing, financial uncertainty could proceed to constrain purchaser exercise.
Whereas current house stock improves and the Fed continues decreasing charges, the market faces headwinds as mortgage charges are anticipated to remain above 6% for longer as a consequence of an anticipated slower easing tempo in 2025. These extended charges could proceed to discourage owners from buying and selling current mortgages for brand spanking new ones with larger charges, protecting provide tight and costs elevated. As such, gross sales are more likely to stay restricted within the coming months as a consequence of elevated mortgage charges and residential costs.
Complete current house gross sales, together with single-family properties, townhomes, condominiums, and co-ops, rose 4.2% to a seasonally adjusted annual fee of 4.26 million in February. On a year-over-year foundation, gross sales have been 1.2% decrease than a yr in the past.
The primary-time purchaser share was 31% in February, up from 28% in January and 26% from a yr in the past.
The prevailing house stock degree was 1.24 million items in February, up from 1.18 million in January, and up 17.0% from a yr in the past. On the present gross sales fee, February unsold stock sits at a 3.5-months’ provide, unchanged from final month however up from 3.0-months’ provide a yr in the past. This stock degree stays low in comparison with balanced market situations (4.5 to six months’ provide) and illustrates the long-run want for extra house development.
Properties stayed available on the market for a median of 42 days in February, up from 41 days in January and 38 days in February 2024.
The February all-cash gross sales share was 32% of transactions, up from 29% in January however down from 33% a yr in the past. All-cash consumers are much less affected by modifications in rates of interest.
The February median gross sales value of all current properties was $398,400, up 3.8% from final yr. This marked the twentieth consecutive month of year-over-year will increase. The median condominium/co-op value in February was up 3.5% from a yr in the past at $355,100. This fee of value progress will gradual as stock will increase.
Present house gross sales in February have been combined throughout the 4 main areas. Gross sales rose within the South (4.4%) and West (13.3%), fell within the Northeast (-2.0%), and remained unchanged within the Midwest. On a year-over-year foundation, gross sales elevated within the Northeast (4.2%) and Midwest (1.0%), decreased within the South (-4.0%), and have been unchanged within the West.
The Pending Residence Gross sales Index (PHSI) is a forward-looking indicator primarily based on signed contracts. The PHSI fell from 74.0 to an all-time low of 70.6 in January. This decline suggests elevated house costs and better mortgage charges proceed to constrain affordability. On a year-over-year foundation, pending gross sales have been 5.2% decrease than a yr in the past, per Nationwide Affiliation of Realtors information.
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