Expect lower mortgage rates to energize home buyers and sellers

Core Insights - The housing market is experiencing a significant increase in available homes, with over 1 million homes listed, the highest for February in five years [1][3][9] - Lower mortgage rates are expected to stimulate buyer and seller activity in March, following a decline in rates throughout February [2][4] - Home value growth has slowed to 2.1% year-over-year, marking the slowest increase in 18 months and indicating a shift in market dynamics [5][9] Market Dynamics - The total number of homes on the market reached 1.04 million in February, which is 15% higher than the previous year, despite a nearly 5% decrease in new listings [3][9] - Listings are taking an average of 23 days to go pending, which is six days longer than last year, suggesting a slower competitive environment [4][9] - Newly pending listings have decreased by nearly 8% compared to the previous year, although they remain about 10% above pre-pandemic levels [5][9] Buyer and Seller Sentiment - Affordability remains a significant challenge for potential buyers, but lower mortgage rates are providing some relief [4] - The current market conditions do not favor either buyers or sellers in negotiations, reflecting a balanced market similar to that of 2019 [6] - The rental market is also experiencing changes, with multifamily rent growth outpacing that of single-family homes for the first time since June 2024 [7] Regional Insights - The report highlights the least competitive markets for buyers, including Miami and New Orleans, and the most competitive markets for sellers, such as Buffalo and San Jose [8] - Home values in various metropolitan areas show diverse trends, with some areas experiencing significant year-over-year changes in value [10]