Existing home sales offer a straightforward view into the U.S. housing market. These are resales of previously owned houses, apartments, and condos, which make up the bulk of transactions each month. Buyers and sellers react to rates, jobs, and local conditions in ways that reflect broader economic moods. The latest numbers from February 2026, released this morning by the National Association of Realtors, show some movement worth watching.
Sales climbed 1.7% from January to a seasonally adjusted annual rate of 4.09 million units. That marks a rebound after January’s dip, beating expectations of a decline. Deals likely locked in during December and January when mortgage rates dipped toward 6% for 30-year fixed loans. Even so, sales sit 1.4% below February 2025 levels, hinting at caution amid higher costs.
Inventory tells a key part of the story. Unsold homes rose 2.4% to 1.29 million units, enough for 3.8 months at the current sales pace. This buildup continues a trend, moving away from the sub three month shortages of recent years. A supply between four and six months counts as balanced, so February’s figure edges closer to neutral ground. Buyers now see more options, which slows bidding wars from pandemic peaks.
Median prices edged up slightly to $398,000, a modest gain from prior months. Year over year, the increase hovers around 1% to 2%, the smallest in a while. Added supply keeps gains in check, while steady wages and low unemployment at 4.1% help some afford payments. Regional splits show the South and Midwest posting stronger sales, while the Northeast and West lag.
Homes now take longer to sell. Time on market stretched as inventory grew, with listings sitting five to ten days more than last year in many areas. Buyers shop carefully, negotiating terms or waiting for rate drops. Sellers respond with incentives like rate buydowns or repairs, showing up in about a third of closed deals. This shift favors buyers compared to 2021s rapid turnover.
Mortgage rates factor heavily. The average 30 year fixed rate held near 6.7% through February, pushing monthly payments on a median home to about $2,600 with 20% down. Applications ticked up 4% recently, tied to brief dips below 6.5%. If the Federal Reserve eases policy as projected, lower rates could spur more activity by spring.
Buyer makeup adds context. First timers accounted for 28% of sales, below the 32% norm, due to down payment hurdles. Repeat buyers led at 56%, tapping home equity for upgrades. Investors took 16%, eyeing rentals with vacancy rates near 6%. All cash deals made up 28%, often from retirees or flippers avoiding financing.
Regional patterns vary. The South saw sales rise 3% month over month, fueled by migration and job growth. Midwest gains offset Northeast weakness from winter storms. Western markets balance high prices with inventory upticks below $500,000, aiding entry level demand. These differences highlight how weather, jobs, and affordability shape local paces.
Economic ties run deep. Housing drives 15% to 18% of GDP through construction, furnishings, and services. February’s uptick supports retail from appliances to decor. With inflation at 2.4% and jobs solid, consumers commit despite affordability strains. Credit tightens for lower scores, though, capping wider entry.
Policy plays a role too. Expanded tax credits for energy upgrades appear in 15% of sales, nudging efficiency. Zoning tweaks in some states aim to add supply over time. Pending sales rose 4.2% year over year, the highest in months, signaling contracts building for March closings.
February’s data paints steady progress. Sales rebound, supply expands, prices stabilize, and sales times lengthen. Buyers hold more power, sellers adjust, and the market tilts toward balance. Job reports and rate moves ahead will shape the spring outlook.
