Existing home sales in the United States saw a significant uptick in February, increasing by a substantial 14.5% to 4.58 million. This sizable growth, which surpassed market expectations of only 5%, could be the end of a 12-month slide and the largest monthly percentage increase since July 2020. The report includes completed transactions of single-family homes, townhomes, condominiums, and co-ops.
The median existing home sales price experienced a slight decrease of 0.2% from the previous year, settling at $363,000, while inventory of unsold existing homes remained unchanged at 980,00.
National Association of Realtors (NAR) Chief Economist Lawrence Yun attributed the surge in sales to home buyers' awareness of changing mortgage rates, with many seizing opportunities presented by rate declines. Yun also noted that stronger sales gains were observed in areas where home prices were decreasing and local economies were generating new jobs.
This surge in existing home sales comes at a time when the US economy is experiencing waning inflation, although it still remains relatively high compared to the FED's long term target of 2%. The rise in home sales, coupled with a sudden rise in building permits, indicates a potential resurgence of the housing market. This development could contribute to a broader economic recovery, as the housing market has historically been a key driver of economic growth.
It's important to remain cautious about interpreting a single month's data as a definite trend however, we need to look at multiple reports in order to determine if the data is a solitary outlier or a new trend.
source: https://www.nar.realtor/
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