Sales of US homes recorded an eyebrow-raising jump as lowered pricetag figures pulled buyers back into the housing market, effectively breaking a 12-month decline across the industry.
Data released by the National Association of Realtors on Tuesday detailed that US home sales rose by 14.5% in February when compared to January figures, which brought the (seasonally adjusted) annual rate to 4.58 million units in February.
The stat marks the largest increase of home sales since July 2020, when the COVID-19 pandemic first caused a shocking increase in demand for homes.
"Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines," Lawrence Yun, the chief economist at NAR, said in a statement. "Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs."
Yun adds that the need for homes in the US remains high, so properties are seeing multiple offers during sales. At the end of February there were only 980,000 homes for sale, which represents a 2.6-month supply, but realtors warn that a level market should have a 4- to 6-month supply.
Average costs for existing homes fell the most in the western US (by about 5.6%). Sales in this region also increased the most, with the number of units being sold rising to 19.4 % in February resulting in an annual rate of 860,000.
The US Midwest saw average home costs rise by 5%, while the US South saw costs rise by 2.7% compared to the average sale costs for these regions in 2022. Existing home sales for February rose in the Midwest by 13.5%, and rose in the South by 15.9%.
Home sale reports for February are based on closings, meaning many of the contracts which make up this spike were likely signed throughout January, when 30-year mortgage rates first fell to around 6%.