February saw an increase in existing-home sales, with the largest month over month increase since December 2015, according to the National Association of Realtors (NAR). NAR reported an 11.8 percent increase in February from January, up to 5.51 million in that month. Additionally, of the four major U.S. regions covered, all three except the Northeast, which remains unchanged, saw sales gains.
According to Lawrence Yun, NAR Chief Economist, "a powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound."
Genworth Mortgage Insurance Chief Economist Tian Liu commented on the growth, noting key factors driving the increase.
“Existing home sales should begin to stabilize this month, as lower interest rates and slower home price growth make homes more affordable to potential buyers," said Liu. "Housing affordability and buyer confidence are two key drivers for housing demand and sales. While housing affordability has improved, potential buyers remain cautious and confidence will take time to recover.”
Homes remained on the market for less time in February, according to the report. Properties remained on the market for an average of 44 days in February, down from 49 days in January but up from 37 days year over year. Forty-one percent of homes sold in February were on the market for less than a month.
According to Yun, the market would greatly benefit from additional inventory.
"For sustained growth, significant construction of moderately priced-homes is still needed," said Yun. "More construction will help boost local economies and more home sales will help lessen wealth inequality as more households can enjoy in housing wealth gains."
Yun notes that the typical homeowners accumulated around $8,700 in housing equity over the past 12 months and $21,300 over the past 24 months.
We're very happy to see homebuyers returning to the market, as the beginning of Spring represents a prime time to purchase a new home," said NAR President John Smaby.
Find more data from NAR here.