Home sales improved in February, a sign that lower mortgage rates are keeping some buyers away, even as overall demand remains weak.
Sales of existing homes rose 1.7% from January to a seasonally adjusted annual rate of 4.09 million, according to data from the National Association of Realtors released Tuesday. Sales improved in all parts of the country except the Northeast, which experienced a prolonged cold snap and snow storm in February.
Home sales are rising month after month, but that follows a bleak January. Sales fell 5.9% that month following data revisions. And sales are still down 1.4% compared to February 2025, a sign that many buyers are scared even in an environment where lower mortgage rates and lower home price appreciation have helped affordability.
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“The improvement in housing affordability and the modest increase in home sales are welcome, but we are still underperforming in the big picture.” said NAR Chief Economist Lawrence Yun.
Mortgage rates averaged 6.05% last month, near the lowest level in several years. Those rates probably convinced some buyers, especially first-timers, to return to the market, Yun added.
But in recent days, marked volatility stemming from the war in Iran has raised mortgage rates to an average of 6.14%. That move has the NAR “concerned,” Yun said. He doesn’t think a repeat of the 1970s, when higher oil prices drove mortgage rates above 18%, is likely, but he did note that higher inflation due to an oil crisis can lead to higher mortgage rates.
claire boston He is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.