Uptick in home sales could signal a modest rebound 

Existing home sales increased from January to February, but they remain behind last year's pace — despite substantially lower mortgage rates.

Sales came in at a seasonally adjusted annual rate of 4.09 million in February, up 1.7% from January but down 1.4% compared to February 2025, according to the National Association of Realtors.

A rebound — or a pullback: While unusually intense winter storms in large parts of the country had an effect on home sales, economic uncertainty appears to be playing a bigger role, and that may continue to weigh on Americans — particularly if the war in Iran and rising energy costs fuel another round of inflation.

"When consumers are uncertain about their job security or the impact of international conflict on their wages, they often pull back from the market entirely," said Marc Halpern, CEO of Foundation Mortgage. 

Halpern and others are still expecting activity to pick up for the spring homebuying season due to pent-up demand, but the extent of the rebound may depend on what happens with global events.

"If the conflict with Iran is limited, the housing market could rebound quickly. However, a prolonged conflict could stall home sales activity this spring," said Lisa Sturtevant, chief economist at Bright MLS.

More homes coming online as prices plateau: The supply of existing homes continues to improve, which may also help the spring market. NAR estimates inventory to be at 1.29 million units, up 4.9% from a year ago. That puts supply at 3.8 months in February versus 3.6 months in January.

The median existing home sales price was nearly flat in February, rising just 0.3% to $398,000. With the slight increase, it marked the 32nd consecutive month of year-over-year increases.

Rates still bouncy: Mortgage rates remain at the lowest levels in more than three years, but the war in the Middle East and a weak jobs report this month have introduced some volatility. After dipping below 6% at the end of February, the 30-year rate averaged 6.14% on Monday, then dropped to 6.09% on Tuesday, March 10, according to Mortgage News Daily.

Interestingly, NAR estimates all-cash purchases increased from 27% in January to 31% in February, despite mortgage rates falling during that period. Cash purchases were also elevated last February, coming in at 32%.

A spring surge? While economic and global concerns might limit homebuying activity this spring, there's also a chance it could lead to a temporary surge in sales — if consumers expect rates to start rising again, according to Danielle Hale, chief economist at Realtor.com.

"Economic uncertainty that stems from the conflict is likely to have some offsetting effects and could create a bit of a rush among consumers to lock in a mortgage rate before they tick higher," Hale said. 

"If this happens, we would see a boost in March sales because buyers who might otherwise have purchased later in the year are pulled forward, and this would then dampen sales later in the year."