February home sales see small rebound, but supply growth is 'sluggish'

Core Insights - Existing home sales in February increased by 1.7% from January to an annualized rate of 4.09 million units, but were down 1.4% compared to February of the previous year [1] Sales Performance - Closed sales in February likely resulted from deals made in December and January when mortgage rates were lower, around 6% for 30-year fixed mortgages, compared to a full percentage point higher a year ago [2] - Despite the slight increase in home sales, actual housing demand is still weak relative to wage growth and job gains, with wage growth outpacing home price growth by nearly four percentage points [3] Inventory and Market Conditions - The inventory of homes for sale at the end of February was 1.29 million units, a 2.4% increase from January and a 4.9% increase from February 2025, resulting in a 3.8-month supply, which is unchanged from January [4] - A significant number of sellers who delisted their homes last fall are now relisting, with nearly 45,000 homes relisted in January, the highest figure for that month in a decade, representing 3.6% of homes on the market [5] Price Trends - The median home price in February was $398,000, reflecting a year-over-year increase of 0.3%, with sales strongest in the highest price category of properties listed at $1 million or above [6] - It is taking longer to sell homes, with the average time on the market increasing to 47 days from 42 days a year ago [7] Buyer Demographics - First-time buyers accounted for 34% of total sales, up from 31% a year ago, while investors maintained a steady 16% share of sales [7]