Existing-Home Sales Increase
(Illustrations courtesy of National Association of Realtors)
Existing-home sales increased by 1.7% month-over-month in February to a seasonally adjusted annual rate of 4.09 million, the National Association of Realtors reported Tuesday.
NAR’s Existing-Home Sales Report said month-over-month sales rose in the Midwest, South and West and fell in the Northeast. Year-over-year sales rose in the South and fell in the Northeast, Midwest and West.
Affordability improved for the eighth consecutive month, according to NAR’s Housing Affordability Index—increasing to 117.6 in February from 117.1 in January and 103.1 a year ago. This marks the highest level since March 2022.
“Housing affordability is improving, and consumers are responding,” NAR Chief Economist Lawrence Yun said. “Still, there is a long way to go to return to pre-pandemic levels of transaction activity. There are more than 6 million more jobs than in 2019, yet home sales per year are down by one million.”
“Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains,” Yun continued. “Wage growth is now outpacing home price growth by almost four percentage points. Mortgage rates are also measurably lower compared to a year ago.”
Hector Amendola, CMB, president of Panorama Mortgage Group, Las Vegas, said the biggest factor in home sales right now is inventory. “When there aren’t enough homes on the market and inventory is tight, home prices remain higher,” he said. “Coupled with low consumer confidence due to the job market and overall economic uncertainties, homebuyers aren’t eager to jump in the market.”
Amendola noted most experts are eager for interest rates to drop dramatically. “But history tells us that when interest rates fall and waves of buyers rush to market to seize on the lower rates, without enough inventory, it becomes a simple supply and demand equation. The net impact of the lower rates without adequate inventory is a price surge because there is greater competition for the few available homes. Inventory is the critical factor impacting home sales for 2026,” he said.
