U.S. Home Sales Rise as Mortgage Rates Ease – What It Means for Buyers and Sellers

U.S. Home Sales Rise as Mortgage Rates Ease – What It Means for Buyers and Sellers

The U.S. housing market saw a boost in February, with home sales rising 4.2% from January (NAR). Lower mortgage rates and an increase in available homes helped bring buyers back into the market. This shift is important for both buyers and sellers looking to make a move in 2025.

What’s Happening in the Market?

Home Prices Continue to Climb

Home prices are still rising, with the median sale price reaching $398,400 in February, a 3.8% increase compared to last year (NAR). This marks the 20th consecutive month of annual price growth, highlighting the ongoing demand for homes despite affordability challenges. According to the National Association of REALTORS® (NAR), U.S. home prices have risen 47% over the last five years (NAR Housing Snapshot).

More Homes Are Available

Inventory is improving, giving buyers more choices. The number of unsold homes rose 17% from February 2024, with 1.24 million properties available for sale (Eye on Housing). While this is a positive sign, the market is still considered tight, with a 3.5-month supply at the current sales pace. A balanced market typically has a 5- to 6-month supply.

Mortgage Rates Are Declining

The average 30-year mortgage rate dropped to 6.67% last week, down from over 7% in January, according to Freddie Mac and Trading Economics. While this is still high compared to the record-low 2.65% rate seen in 2021, it has encouraged more buyers to enter the market. Lower rates can improve affordability and bring more first-time buyers into the market.

What This Means for You

For Buyers

• More Choices: Rising inventory gives buyers more options when searching for their ideal home.
• Competitive Market: Home prices remain high, and competition is steady, especially in desirable areas.
• First-Time Buyers Are Returning: First-time buyers accounted for 31% of home purchases in February, up from 26% a year ago (NAR Research).

For Sellers

• More Competition: With more homes on the market, pricing strategically is key to attracting buyers.
• Longer Time to Sell: Homes spent an average of 42 days on the market in February, slightly longer than last year (Zillow).
• Proper Preparation Matters: Staging, professional photos, and competitive pricing can help your home stand out.

Is Now a Good Time to Buy or Sell?

The market is shifting, making it important to have a well-thought-out strategy. Buyers can take advantage of lower mortgage rates and increased inventory, while sellers should focus on pricing and marketing their homes effectively.

Thinking of buying or selling? Let’s discuss your goals and make a plan that fits the current market.

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📌 References:

• National Association of REALTORS® - Existing-Home Sales Report
• Freddie Mac - Mortgage Rates
• Trading Economics - U.S. 30-Year Mortgage Rate
• NAR Research - February 2025 Sales Data
• Eye On Housing - February Existing Home Sales
• Zillow - February 2025 NAR Existing Home Sales

📌 Disclaimer: This content is for informational purposes only and should not be considered legal, tax, financial, or investment advice.