A real estate sign is posted outside of a recently sold home, Tuesday, Feb. 21, 2023, in Valrico, Fla. On Tuesday, (AP Photo/Phelan M. Ebenhack)
Sales of previously owned homes surged 14.5 percent in February, ending a 12-month streak of steady declines, according to the National Association of Realtors.
While sales were still down 22.6 percent from the year before, the upswing signaled that the housing market is regaining strength, as Homebuyers appear to be responding to lower prices and slowing rate hikes.
"Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines," said NAR Chief Economist Lawrence Yun. "Moreover, we're seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs."
The national median existing-home price, meanwhile, dropped 0.2 percent in February. That is down 12.3 percent from a peak in June and the first year-over-year decline since February, 2021.
The average 30-year fixed mortgage rate also moderated in February, giving buyers a break from the economic tightening kicked off by the Federal Reserve last year. The rate slipped again last week to 6.60 percent, according to Freddie Mac.
As for the supply side of the equation, housing inventory didn't budge between January and February, sticking around 980,000 units, but it's still up 15.3 percent from one year ago.
"Inventory levels are still at historic lows," Yun said. "Consequently, multiple offers are returning on a good number of properties."
Americans stepped up their spending in December more than expected, closing out the holiday season and the year on an upbeat tone. The Commerce Department said retail sales rose 0.6% in December compared with a November’s 0.3% increase.
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