Is the housing market recovering? Read on for the latest trends and what it means for buyers and sellers!

WASHINGTON (March 20, 2025) – The National Association of REALTORS® (NAR) has revealed that existing-home sales experienced an unexpected boost in February, jumping by 4.2% from January, reaching a seasonally adjusted annual rate of 4.26 million. However, compared to the same period last year, sales dipped slightly by 1.2% from 4.31 million in February 2024.

NAR Chief Economist Lawrence Yun noted, "Home buyers are gradually re-entering the market. While mortgage rates have largely stabilized, the increase in inventory and available choices is igniting previously pent-up housing demand."

The total housing inventory at the end of February was recorded at 1.24 million units, marking a 5.1% increase from January and an impressive 17% surge from the previous year (1.06 million). Unsold inventory currently reflects a 3.5-month supply at the present sales pace, matching the situation in January and slightly higher than the 3.0 months noted in February 2024.

On a technical note, raw sales in February dropped by 5.2% from last year, affected by the leap year. Yun explained, "After adjustments accounting for these factors, the momentum for home sales is showing encouraging signs moving forward."

Rising Prices, Rising Equity

February's median existing-home price for all housing types stood at $398,400, showcasing a growth of 3.8% from last year ($383,800). Notably, all four regions of the U.S. saw rising home prices. Yun elaborated, "Every percentage point increase in home prices results in approximately $350 billion more in housing equity for American property owners, equating to nearly $1.3 trillion in home value appreciation during a period when the stock market faces corrections."

Buyer Trends and Confidence Index Insights

The REALTORS® Confidence Index revealed that properties typically lingered on the market for 42 days in February, showing a modest increase from 41 days in January and 38 days in February 2024. Notably, first-time home buyers accounted for 31% of sales last month, marking an increase from 28% in January and 26% the previous year.

Interestingly, cash transactions represented 32% of February’s sales, an uptick from 29% in January, although it was down from 33% in February 2024. Individual investors, who contribute significantly to cash sales, purchased 16% of homes in February, down from 17% in January and 21% a year prior. Distressed sales (foreclosures and short sales) remained stable at 3% of total sales.

Mortgage Rates Update

As of March 13, Freddie Mac reported that the average rate for a 30-year fixed mortgage was 6.65%, a slight increase from the previous week but down from 6.74% year-on-year.

Regional Highlights: A Closer Look

- **Northeast:** Existing-home sales fell 2.0% from January, arriving at an annual rate of 500,000, but saw an increase of 4.2% compared to last February. The median price here rose to $464,300, a 10.4% year-on-year increase.

- **Midwest:** Sales held steady at an annual rate of 1 million, a 1.0% rise from the previous year. Median prices in this region climbed to $295,500, a 5.8% increase from last February.

- **South:** In the South, sales increased by 4.4% from January to reach 1.91 million, though this was a 4.0% decline compared to last year. The region’s median price is now $358,800, reflecting a 1.9% year-over-year rise.

- **West:** Notably, the West experienced a remarkable 13.3% surge in existing-home sales to an annual rate of 850,000, on par with the same time last year. The median price there escalated to $614,600, up by 3.6% from February of the previous year.

What's Next?

As the market dynamics continue to evolve, all eyes will be on the upcoming release of NAR's Pending Home Sales Index for February on March 27, and the Existing-Home Sales report for March on April 24.

Stay tuned to see if these trends will solidify or if the market will face new challenges as we move into the spring selling season!