Existing home sales rebound in February, beating expectations

Used home sales rebounded 1.7% in February from January and exceeded analysts' forecasts, boosted by lower mortgage rates.

Interest rates on 30-year mortgages - the most common in the country - fell from 8% recorded at the end of 2023 to around 6%.

"Housing affordability is improving, and consumers are responding," said Lawrence Yun, chief economist for the National Federation of Realtors (NAR), in a statement.

Also, the NAR contends that month-over-month sales increased in the Midwest, the South and the West, but fell in the Northeast. On a year-over-year basis, sales rose in the South and fell in the Northeast, Midwest and West, according to the organization.

Existing home sales surprise on the upside

According to data released Tuesday by the NAR, the second month of the year saw 4.09 million transactions at an annualized rate, or the 12-month sales projection if current conditions were to hold.

The expert consensus gathered by MarketWatch anticipated, instead, a slowdown in the sales pace to 3.86 million annualized.

Pandemic aftermath continues to slow activity

Despite recent signs of improvement, the real estate market is still dragging down the aftermath of the pandemic, which profoundly altered buying patterns and the dynamics of the sector.

"Still, there is a long way to go to return to pre-pandemic levels of transaction activity. There are more than 6 million more jobs than in 2019, yet home sales per year are down by one million. Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains. Inventory is growing, but sluggishly," stated Lawrence Yun.