Existing-home sales increased 1.7 percent on a monthly basis, but housing demand continues to lag behind wage growth and job gains, NAR Chief Economist Lawrence Yun said.
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Existing-home sales inched upwards slightly in February, as new data also showed that total home sales in 2025 were their lowest in over a decade.
Existing-home sales increased 1.7 percent from January 2026 to February 2026 to an adjusted annual rate of 4.09 million, but declined 1.4 percent year over year, according to a report released by the National Association of Realtors (NAR) on Tuesday.
The figures were a significant improvement from January, when existing-home sales plunged 8.4 percent from the previous month as winter storms hit many areas of the U.S.
On a monthly basis, existing-home sales increased in all major regions of the U.S. in February, except for the Northeast. On an annual basis, existing-home sales only rose in the South.
Housing affordability saw modest improvement during February, with NAR’s Housing Affordability Index increasing from 117.1 in January 2026 to 117.6 in February 2026, which was up from 103.1 during the same time in 2025. Affordability has hit its highest level since 2022, NAR said.
Lawrence Yun | Chief economist at the National Association of Realtors
“Housing affordability is improving, and consumers are responding,” NAR Chief Economist Lawrence Yun said in NAR’s report. “Still, there is a long way to go to return to pre-pandemic levels of transaction activity. There are more than 6 million more jobs than in 2019, yet home sales per year are down by one million.”
“Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains,” Yun added. “Wage growth is now outpacing home price growth by almost four percentage points. Mortgage rates are also measurably lower compared to a year ago.”
Yun said that inventory has been growing, but very slowly, and if demand increases significantly deeper into the spring market and surpasses supply growth, home prices will rise.
Heather Long, chief economist at Navy Federal Credit Union, said if mortgage rates can continue to dip below 6 percent, there will be more movement in the market.
Heather Long | Navy Federal Credit Union
“If mortgage rates go below 6 percent, Americans will buy homes,” Long said in a statement sent to Inman. “The mentality has shifted about what a ‘good’ mortgage rate is, and people are responding when mortgage rates fall. Affordability is clearly still a challenge, but it is improving slightly. NAR’s Housing Affordability Index shows the best conditions since March 2022. The Atlanta Fed’s Housing Affordability Monitor shows the best conditions since January 2024. At Navy Federal, we are seeing strong demand for loans that do not require a 20 percent down payment. Potential buyers are able to purchase their dream home if the down payment is lower.”
Total housing inventory was up 2.4 percent from January and up 4.9 percent from February 2025 to 1.29 million units, which represents a 3.8-month supply.
The median sales price was $398,000 for all housing types, which is up 0.3 percent year over year.
Single-family home sales rose 2.5 percent on a monthly basis to a seasonally adjusted annual rate of 3.73 million. Single-family sales also declined 1.1 percent year over year. The median single-family home price was $401,800, up 0.2 percent year over year.
Condo and co-op sales decreased 5.3 percent on both a monthly and annual basis in February to a seasonally adjusted annual rate of 360,000. The median condo and co-op sale price was $358,100, up 0.9 percent year over year.
Total home sales worst in 14 years
New data also shows that total home sales of new and existing properties were their worst in 14 years in 2025, according to an analysis by Realtor.com.
Although sales saw some slight improvements in the Northeast, Midwest and South, a 3 percent annual decline in the West was enough to tip national sales growth negative. Realtor.com economists said the market’s weak performance in 2025 was largely due to high mortgage rates and home prices.
Joel Berner | Credit: Realtor.com
“It goes to show how sensitive the market is to interest rates,” Realtor.com Senior Economist Joel Berner said in the company’s report. “The last three years have had total sales levels that are on part with the years following the global financial crisis [of 2007-09], but there has been no exogenous shock anywhere near that level during the post-COVID recovery.”
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