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Realtor.com writes, "This year’s housing market is off to a strong start.

Sales of existing homes, which exclude new construction, jumped 9.5% from January to February, according to a recent report from the National Association of Realtors®. That was the largest month-over-month increase in a year.

However, sales did dip a little annually, coming down 3.3% from February 2023.

The surge in monthly closings is likely due to the drop in mortgage rates, which began declining last fall. This brought more buyers into the market and, importantly, might have persuaded more homeowners to sell their properties. As most sellers are also buyers, many have been reluctant to trade a low mortgage rate for a higher one.

Mortgage rates averaged 6.87% for 30-year fixed loans in the week ending March 21, according to Freddie Mac.

“Mortgage rates tumbled from late October through mid-January, steadying through early February at some of the lowest rates since May 2023,” Realtor.com® Chief Economist Danielle Hale said in a statement. “This dip brought down buying costs and enabled more households to plan to make a move in 2024.”

Home prices also continued to rise, going up 5.7% year over year to hit a median of $384,500. This was the eighth month in a row of annual price increases.

“Housing affordability continues to be a key challenge for shoppers, and as a result, consumers are likely to remain sensitive to interest rate fluctuations in the year ahead,” Hale said.

The rise in sales is also likely a result of more homes going up for sale. The number of existing homes on the market went up 5.9% in February from the previous month. There were 10.3% more existing homes for sale than in February 2023.

“Additional housing supply is helping to satisfy market demand,” NAR Chief Economist Lawrence Yun said in a statement. “Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”

That hasn’t made it much easier for first-time buyers, though. Just 26% of this group successfully purchased a home in February, according to NAR. That represented a slight decrease from January, when this group made up 28% of buyers.

Many were likely beaten out by all-cash buyers and investors. About a third, 33%, of all existing-home sales were all-cash sales in February, up from 28% a year earlier, according to NAR. Individual investors and second-home buyers (many of them cash buyers) picked up 21% of existing homes.

Just 3% of sales were foreclosures and short sales.

Where are home sales rising and falling the most?

Sales were the highest in the West, South, and Midwest and fairly stable in the Northeast.

In the West, existing-home sales surged, rising 16.4% from January to February. They did tick down slightly, 1.2%, year over year. The median existing-home price in the region was $593,000, a 9.1% bump from February 2023.

The South also experienced strong sales, up 9.8% month over month. But sales did decrease 2.9% year over year. The median home price was $354,200, up 4.1% annually.

Sales were also strong in the Midwest, rising 8.4% month over month, but falling 3.7% year over year. The region’s median price was $277,600, a 6.8% annual rise.

Existing-home sales in the Northeast were the same in January and February, but fell 7.7% year over year. The median existing-home price in the region was $426,000—up 11.5% from the same month last year.

“With prices still going up, the number of homes on the market still limited, and equity still quite high, homeowners who choose to pursue a sale in 2024 face relatively healthy market conditions,” said Hale. “Those hoping to capitalize on the best conditions of the spring market, however, would do well to start planning now. Realtor.com research suggests that the best week to list a home for sale nationwide will be April 14–20, 2024, giving a little over a month from now to prepare.”"

Source: Realtor.com

Written by: Clare Trapasso

Published: March 21, 2024

Posted by Grossman & Jones Group on


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