- Existing home sales surged 4.2% monthly to 4.26 million annualized rate
- Median prices climbed nearly 4% year-over-year, marking 20 months of gains
- Housing inventory jumps 17% annually, easing market competition
The US housing market showed unexpected resilience in February as buyers returned to a landscape of moderating mortgage rates and expanding inventory. Nearly 4.3 million existing homes changed hands on an annualized basis, exceeding economic forecasts by 8.7%. This uptick follows five consecutive months of year-over-year declines, suggesting a potential turnaround as spring buying season approaches.
Financial analysts attribute the surge to 30-year fixed mortgage rates stabilizing near 6.8% after peaking at 7.8% in October 2023. We're seeing first-time buyers re-enter the market cautiously,noted Los Angeles broker Maria Chen. In Southern California, inventory has doubled since last summer, giving shoppers time to compare properties without bidding wars.
Three critical factors are reshaping market dynamics:
- Remote work flexibility driving demand in suburban markets
- Baby boomers downsizing, freeing up larger family homes
- Builders accelerating new construction to meet demand
Regional disparities remain pronounced. In Austin, listings have swelled 34% year-over-year, while Northeast markets like Boston maintain sub-2-month inventory levels. The Midwest continues to attract affordability-focused buyers, with cities like Indianapolis reporting 12% faster sales cycles than coastal counterparts.
Industry experts advise buyers to leverage improved negotiating power. Sellers are increasingly offering closing cost assistance and rate buydowns,revealed Redfin analyst Derek Thompson. We've seen a 15% increase in contingency clauses being accepted compared to 2022's peak market.
As the Federal Reserve signals potential rate cuts in late 2024, economists predict sustained inventory growth. NAR projections suggest a 7-9% annual increase in home sales if rates dip below 6.5%. However, affordability challenges persist – the median household now spends 35% of income on mortgage payments, down from 2023's 41% peak but still above historical norms.
