Surge in Existing Home Sales: February Market Trends Reveal Growing Demand
The housing market is heating up, with February marking a significant rise in the typical cost of existing homes across all property types. The median price reached $398,400, reflecting a 3.8% increase from the same time last year. This marks the 20th consecutive month of year-over-year price appreciation, with all four U.S. regions seeing notable gains in home prices. This extended period of steady price growth highlights the strength of the market, despite fluctuations in mortgage rates.
First-Time Homebuyers Make Their Move
One of the most noteworthy trends in February’s real estate landscape is the surge in first-time homebuyers. New buyers accounted for 31% of February’s home purchases, up from 28% in January and 26% a year ago. This increase signals that first-time buyers are no longer waiting for mortgage rates to fall before entering the market. According to Holden Lewis, a home and mortgage expert at NerdWallet, this shift suggests that many new buyers are looking to secure a home now, with the intention of refinancing when mortgage rates become more favorable in the future.
Cash Sales Show Consistent Strength
Cash sales continued to represent a significant portion of the market in February, accounting for 32% of transactions. This marks an increase from 29% in January but is slightly lower than the 33% recorded in February 2025. A large share of these cash sales were made by individual investors and second-home buyers, who often prefer to pay in cash. Investors and second-home buyers accounted for 16% of all sales in February, which was down slightly from 17% in January and 21% a year ago. Troubled sales, including foreclosures and short sales, remained steady at 3% of total transactions, highlighting the ongoing resilience of the broader market.
Regional Variations in Sales Trends
The performance of the housing market varied across the country. The West saw the most significant gain, with existing-home sales rising by 13.3% from January, matching the sales pace seen in 2014. The South experienced a more modest 4.4% increase, though sales remained 4.0% lower than February 2025. The Northeast saw a slight dip of 2.0% in month-over-month sales but posted a 4.2% increase compared to last year. Meanwhile, the Midwest remained relatively stable, with no change from January and a small 1.0% uptick compared to the previous year.
Mortgage Rates and Market Outlook
Mortgage rates continue to play a critical role in shaping the housing market. As of March 13, the 30-year fixed-rate mortgage averaged 6.65%, slightly up from 6.63% the week before but lower than the 6.74% recorded in March 2024. While mortgage rates have not drastically changed, their movement still influences buyer behavior. With rates stabilizing somewhat, many buyers are taking advantage of current conditions, which is helping to drive the market forward.
In conclusion, the housing market in February saw strong price gains and increased activity from first-time buyers, with cash sales holding steady. While the market remains diverse across different regions, the overall trend points to continued demand and resilience. As mortgage rates continue to influence buyer behavior, the market is expected to remain dynamic, with fluctuations offering both challenges and opportunities for buyers and sellers alike.
