Existing-home sales posted a modest increase in February, according to the latest National Association of REALTORS® Existing-Home Sales Report, signaling gradual movement in the housing market as affordability improves and mortgage rates trend lower.
A Small Uptick in Sales
Existing-home sales increased 1.7% month-over-month, reaching a seasonally adjusted annual rate of 4.09 million in February. Despite the monthly improvement, sales remain 1.4% lower than one year ago, reflecting a market that is still adjusting to higher costs and limited inventory.
Sales activity rose in the Midwest, South, and West, while the Northeast experienced a decline month-over-month.
Inventory Slowly Improving
Housing supply increased slightly in February, with 1.29 million homes available for sale, up 2.4% from January and 4.9% from one year ago. That represents a 3.8-month supply of homes, which is still below the level considered a balanced market.
NAR Chief Economist Dr. Lawrence Yun noted that while affordability is improving, the market still has room to grow.
“Housing affordability is improving, and consumers are responding,” Yun said. “Still, there is a long way to go to return to pre-pandemic levels of transaction activity.”
Prices Continue to Edge Higher
Home prices continued their steady climb in February. The median existing-home price reached $398,000, a 0.3% increase from one year ago, marking the 32nd consecutive month of year-over-year price growth.
Single-family homes saw a 2.5% increase in sales month-over-month, with a median price of $401,800. Meanwhile, condominium and co-op sales declined 5.3%, with a median price of $358,100.
Affordability Shows Continued Improvement
Affordability improved for the eighth consecutive month, with the NAR Housing Affordability Index rising to 117.6, the highest level since March 2022.
Lower mortgage rates are contributing to the improvement. The average 30-year fixed-rate mortgage was 6.05% in February, down from 6.84% one year ago, according to Freddie Mac.
What This Means for New Jersey REALTORS®
While the report reflects national trends, the data highlights several factors that are especially relevant for New Jersey REALTORS®.
Inventory remains the biggest challenge. Even with modest national growth in supply, housing inventory across much of New Jersey—particularly in our area—continues to lag behind demand, helping to support home prices.
Buyer demand remains steady. First-time homebuyers accounted for 34% of transactions in February, indicating continued interest from buyers looking to enter the market despite affordability challenges.
Home prices remain resilient. In the Northeast region, the median home price reached $479,800, up 3.3% from one year ago, reflecting the impact of ongoing inventory constraints.
NCJAR® Local Market Perspective
For NCJAR® members, these national trends mirror what many of our REALTORS® are seeing locally.
Limited inventory continues to shape the market, particularly in entry-level and mid-range price points, where demand from first-time buyers and move-up buyers remains strong. Even modest declines in mortgage rates are helping some buyers re-enter the market after sitting on the sidelines in 2024 and early 2025.
For REALTORS®, this environment highlights the importance of educating potential sellers about current market conditions, as additional inventory will be critical to improving affordability and supporting transaction growth in the months ahead.
As the spring market approaches, REALTORS® may begin to see increased activity if mortgage rates stabilize and more sellers choose to list, helping to bring greater balance to the housing market.
Source: NAR Real Estate News
