Lawrence Yun, NAR’s chief economist, said existing home sales rose 1.7% on a monthly basis, but housing demand continued to lag wage growth and employment growth.
New data also shows total home sales in 2025 will be the lowest in more than a decade, while existing home sales rose slightly in February.
Existing home sales rose 1.7% from January 2026 to February 2026 to an adjusted annual rate of 4.09 million units, but were down 1.4% from a year earlier, according to a report released Tuesday by the National Association of Realtors (NAR).
This number was a significant improvement from January, when existing home sales fell 8.4% month-over-month as winter storms hit many parts of the United States.
On a monthly basis, existing home sales increased in February in all major U.S. regions except the Northeast. On an annual basis, existing home sales increased only in the South.
Housing affordability saw some improvement during February, with NAR’s Housing Affordability Index increasing from 117.1 in January 2026 to 117.6 in February 2026, up from 103.1 in the same period in 2025. Home affordability has reached its highest level since 2022, according to NAR.
Lawrence Yun | Chief Economist, National Association of Realtors
“Housing affordability is improving, and consumers are responding,” NAR Chief Economist Lawrence Yun said in a NAR report. “Still, there is a long way to go before transaction activity returns to pre-pandemic levels. Home sales are down 1 million a year, even though employment is more than 6 million more than in 2019.”
“Despite the slight increase in home sales, actual demand for housing remains slower than wage growth and employment growth,” Yun added. “Wage growth is now almost 4 percentage points outpacing house price growth. Mortgage rates are also visibly lower than they were a year ago.”
Yun said inventory is increasing but very slowly, and home prices will rise if demand increases significantly deep into the spring market and outpaces supply growth.
Heather Long, chief economist at Navy Federal Credit Union, said the potential for mortgage rates to remain below 6% could lead to further movement in the market.
Heather Long | Navy Federal Credit Union
“Americans will buy homes when mortgage rates fall below 6%,” Long said in a statement to Inman. “Thinking about what is a ‘good’ mortgage rate is changing and people are responding when mortgage rates drop. It is clear that housing affordability remains a challenge, but it is improving slightly. NAR’s Home Affordability Index shows the best situation since March 2022. The Atlanta Fed’s Housing Affordability Monitor shows the best conditions since January 2024. Navy Federal is seeing strong demand for loans that don’t require a 20 percent down payment.”A low down payment allows potential buyers to purchase their dream home. ”
The total housing stock amounted to 1.29 million units, an increase of 2.4% from January 2025 and 4.9% from February 2025, equivalent to 3.8 months of supply.
The median sales price for all home types was $398,000, up 0.3% year over year.
Single-family home sales increased 2.5% month over month to a seasonally adjusted annual rate of 3.73 million. Sales of single-family homes also fell by 1.1% from the previous year. The median single-family home price was $401,800, up 0.2% from a year earlier.
Condominium and co-op sales in February fell 5.3% on both a monthly and annual basis to a seasonally adjusted annual rate of 360,000 units. The median sales price for condos and co-ops was $358,100, up 0.9% from a year ago.
Total home sales are the worst in 14 years
New data also shows total home sales for new and existing properties in 2025 are the worst in 14 years, according to an analysis by Realtor.com.
Although there was some improvement in the Northeast, Midwest, and South, the 3% annual decline in the West was enough to turn national sales growth negative. Economists at Realtor.com said the 2025 market downturn is largely due to high mortgage rates and home prices.
Joel Varner |Credit: Realtor.com
“This just goes to show how sensitive the market is to interest rates,” Joel Berner, senior economist at Realtor.com, said in a note from Realtor.com. “Total sales levels for the past three years have been similar to those in the years following the global financial crisis.” [of 2007-09]However, the post-COVID-19 recovery has not experienced an exogenous shock close to that level. ”
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