Sales of previously occupied US homes eased mortgage rates in February and promoted more property in the market, thus driving home shoppers.
Existing home sales have increased by 4.2% to a seasonally adjusted annual rate of 426 million units since last January, the National Association of Realtors said Thursday.
Sales fell 1.2% compared to February last year, ending a series of five straight annual increases.
According to FactSet, the latest home sales were predicting 3.92 million pace economists.
On an unadjusted basis, sales fell 5.2% in February last year. This month included an extra day for the month as 2024 was the year of jumping.
Home prices have risen annually for the 20th consecutive month. The national median selling price rose 3.8% in February from the previous year, reaching a record high of $398,400 in February.
“Homebuyers are slowly entering the market,” said Lawrence Yun, chief economist at NAR. “Mortgage prices haven't changed much, but more inventory and options are freeing up pent-up housing needs.”
U.S. home sales began to slump in 2022 when mortgage rates began to rise from pandemic-era lows. Sales of previously occupied US homes fell to their lowest levels last year in nearly 30 years.
The average 30-year mortgage rate fell briefly in September last year, but by mid-January it didn't stay long, slightly above 7%.
Since then, mortgage fees have fallen mostly, sliding to an average of 6.76% by the last week of February.
Mortgage buyer Freddie Mac said the rate averaged 6.65% last week.
This is more than double the record low of 2.65%, which averaged over four years ago.
Still, the overall dip at the rate over the last few weeks will be welcomed with modest, relief for home shoppers as the spring home buying season progresses.
Those who can avoid it entirely by purchasing with current mortgage fees or paying cash also benefit from a wide range of wealth in the market.
At the end of last month there were 1.24 million homes selling, up 5.1% from January and 17% from February last year, Nar said.
This has been converted to a 3.5-month supply at the current sales pace, and has not changed from the three-month pace since January at the end of February last year.
Traditionally, supply over 5-6 months was considered a balanced market between buyers and sellers.
One reason home inventory for sale is rising is that property takes longer to sell.
The house usually remains in the market for 42 days last month, rising from 41 days in January and 38 days in February last year.
