Sales of previously owned homes rose in February for the first time in over a year, as home prices fell on an annual basis for the first time in nearly 11 years.
The National Association of Realtors (NAR) reported existing home sales jumped 14.5% from January to an annual rate of 4.58 million. It was the largest monthly percentage increase since July of 2020.
The rise in sales came as the median sales price for a single-family home dropped 0.2% from 2022 to $363,000, breaking a streak of 131 consecutive months of year-over-year gains. Also helping boost demand was a decrease in borrowing costs. Mortgage originator Freddie Mac indicated the rate on a 30-year, fixed-rate conforming home loan (up to $726,200) fell to the lowest level in five months in February.
Buyers Attuned to Rates
"Home buyers are conscious of changing mortgage rates and taking advantage of any moves downward," said NAR Chief Economist Lawrence Yun. He added that sales growth has been stronger "in areas where home prices are decreasing and the local economies are adding jobs."
Yun explained total housing inventory at the end of the month held steady from January at 980,000 units, remaining near historic lows. He said because of that, "multiple offers are returning on a good number of properties."