An aerial view of homes and an up arrow
Illustration by Lanette Behiry/Real Estate News; Shutterstock

Existing sales make the biggest leap in a year 

While home sales still aren’t as strong as they were in 2023, the near-10% jump in February “is a good sign” — but the momentum may not last.

March 21, 2024
3 minutes

Key points:

  • Sales were down 3.3% year-over-year, but up 9.5% between January and February.
  • Median home prices have continued to climb, with the Northeast posting double-digit price gains.
  • Rising prices may be deterring first-time buyers, who accounted for a smaller share of total buyers in February, while second-home buyers and investors were more active.

Existing home sales continued their upward swing, increasing 9.5% last month to a seasonally adjusted annual rate of 4.38 million sales, NAR reported.

While overall sales were down 3.3% compared to last year, it's the largest monthly gain since 2023, and comes at a moment when the real estate industry can use some sunshine as it navigates rising interest rates and potential changes to commissions.

The boost in sales was attributed to growing inventory and sustained demand. The inventory of unsold homes rose to 1.07 million, a 5.9% month-over-month increase, offering a 2.9-month supply at the current sales pace.

Will this trend continue?

There may be clouds on the horizon, according to Bright MLS Chief Economist Dr. Lisa Sturtevant.

"The uptick in sales activity between January and February is a good sign, but there is some uncertainty in the housing market as we head into spring," Sturtevant said. "Buyers and sellers seem to be adjusting to the 'new normal' of mortgage rates above 6.5%. However, as home prices continue to rise, affordability is a growing challenge."

The median home price increased for the eighth month in a row to $384,500 with annual price growth ranging from 4% to more than 11% in regions across the U.S.

How things are playing out across the country

The West, South and Midwest experienced sales jumps, while the Northeast held steady.

Home sales in the Northeast came in at 480,000 units for the fourth consecutive month, while the median sales price hit $420,600, up 11.5% compared to last year. 

The biggest increase was seen in the West, where existing home sales were up 16.4% compared to the previous month. However, that was still a drop of 1.2% compared to the same time last year. The median home price, meanwhile, was $593,000, a 9.1% increase vs. last year.

In the Midwest, sales rose 8.4% from January but dropped 3.7% compared to last year. The median price — $277,600 — was a 6.8% increase from February 2023.

The South saw sales increase to 9.8% compared to January, down 2.9% vs the previous year. The median home price, meanwhile, increased 4.1% to $354,200.

"Due to inventory constraints, the Northeast was the regional underperformer in February home sales but the best performer in home prices," NAR Chief Economist Lawrence Yun said. "More supply is clearly needed to help stabilize home prices and get more Americans moving to their next residences."

Investor purchases, cash sales up

The number of first-time homebuyers dropped in February, coming in at 26% last month compared to 28% in January and 27% a year prior, NAR reported.

Meanwhile, individual investors and second-home buyers bought 21% of homes in February, which is an increase from January (17%) and February of 2023 (18%).

More than a third of sales in February were all-cash, which is a popular route for investors. That's up from the previous month (32%) and last February (28%).

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