The U.S. housing market saw a slight increase at the beginning of the year, but rising mortgage rates could negatively impact sales during the busy spring season.

The US real estate market saw a slight recovery at the beginning of the year, but with mortgage rates rising again, industry insiders are concerned that the upcoming spring sales season may be suppressed. Data released by the National Association of Realtors (NAR) shows that existing home sales in February increased by 1.7% month-on-month, with a seasonally adjusted annual sales rate of 4.09 million units. However, sales were still down 1.4% compared to the same period last year. Since existing home sales data reflects completed transactions, most of the transactions reported in February actually took place in December of last year and January of this year. At that time, the 30-year fixed mortgage rates in the US dropped to around 6%, compared to the previous levels, but still about 1 percentage point higher compared to a year ago. Lawrence Yun, Chief Economist of the National Association of Realtors, stated that despite the slight increase in sales data, overall housing demand remains relatively weak. He pointed out that currently, wage growth is nearly 4 percentage points faster than house price growth, and mortgage rates have also decreased significantly compared to last year. However, looking at the longer-term perspective, the real estate market still appears sluggish. Yun noted that the number of current jobs in the US has increased by more than 6 million since 2019, but the annual housing sales volume has decreased by about 1 million units since then. Although lower mortgage rates have somewhat improved housing affordability, insufficient housing supply remains a major challenge for the market. Data shows that as of the end of February, there were 1.29 million homes for sale in the US market, an increase of 2.4% compared to January and 4.9% compared to the same period in 2025. At the current sales rate, inventory only equals 3.8 months of supply, remaining steady from January, while the market typically considers 6 months of supply to be a relatively balanced state for both buyers and sellers. Meanwhile, some previously withdrawn listings are being relisted for sale. Real estate brokerage firm Redfin's data shows that around 45,000 homes were relisted for sale in January, the highest level in January since Redfin began tracking this metric a decade ago, accounting for about 3.6% of the total market inventory for that month. Yun stated that although inventory has increased, the growth rate is still slow. If housing demand significantly increases in the coming months surpassing the growth rate of supply, prices may rise again. Therefore, increasing housing supply is essential to suppressing price increases, improving housing affordability, and boosting transaction activity. Supply constraints continue to support prices. Data shows that the median price for existing home sales in February was $398,000, only a 0.3% increase compared to the previous year. In terms of price structure, sales of high-end properties priced at $1 million and above continue to perform the strongest, while sales of lower-priced homes have seen a noticeable decline. Additionally, the housing sales cycle is also lengthening. The average sales cycle for homes in February was 47 days, higher than the 42 days in the same period last year. First-time buyers accounted for 34% of all transactions, up from 31% a year ago; while investor purchases remained at 16%, the same as the previous year.