February 2025 National Market Update

National Real Estate Market Update – February 2025

The U.S. housing market showed signs of momentum in February, with existing-home sales rising 4.2% from January, according to the National Association of REALTORS® (NAR). However, year-over-year sales dipped 1.2%, reflecting ongoing market adjustments. While two major U.S. regions saw sales growth, one remained stable, and another experienced a decline.

Market Trends and Inventory

The total housing inventory rose to 1.24 million units, up 5.1% from January and 17% year-over-year. Despite the increase in supply, unsold inventory remains at a 3.5-month supply, the same as January but slightly higher than the 3.0-month supply in February 2024. This suggests that while inventory is growing, demand is keeping pace.

NAR Chief Economist Lawrence Yun noted that mortgage rates have remained relatively stable, allowing more buyers to enter the market. "More inventory and choices are releasing pent-up housing demand," Yun said.

Home Prices on the Rise

The median existing-home price for all housing types climbed to $398,400, up 3.8% from February 2024 ($383,800). Homeowners nationwide saw nearly $1.3 trillion in home equity gains, reinforcing a strong market despite fluctuations in stock market performance.

Each region recorded price increases:

• Northeast: $464,300 (+10.4%)

• Midwest: $295,500 (+5.8%)

• South: $358,800 (+1.9%)

• West: $614,600 (+3.6%)

Buyer & Seller Activity

Properties remained on the market for an average of 42 days, slightly longer than 41 days in January and 38 days in February 2024.

First-time buyers accounted for 31% of all transactions, up from 28% in January and 26% a year ago. This marks a positive shift for new buyers despite ongoing affordability challenges.

Cash sales increased to 32% of transactions, compared to 29% in January, but slightly lower than 33% last year. Investor activity declined, with 16% of purchases coming from investors and second-home buyers, down from 21% in February 2024.

Distressed sales (foreclosures and short sales) remained low at 3%, unchanged from both January and the previous year.

Mortgage Rates & Financing Trends

The 30-year fixed mortgage rate averaged 6.65% as of March 13, reflecting a slight increase from 6.63% the previous week but a small drop from 6.74% a year ago. While mortgage rates remain elevated compared to pandemic-era lows, they have remained relatively steady, helping sustain buyer activity.

Single-Family vs. Condo/Co-op Sales

• Single-family home sales climbed 5.7% month-over-month but were down 0.3% year-over-year, with a median price of $402,500 (+3.7%).

• Condo and co-op sales dropped 9.8% from January and 9.8% year-over-year, with a median price of $355,100 (+3.5%).

Regional Breakdown

• Northeast: Sales declined 2.0% from January but rose 4.2% year-over-year.

• Midwest: Sales remained unchanged month-over-month, up 1.0% from 2024.

• South: Sales rose 4.4% from January but were down 4.0% year-over-year.

• West: Sales jumped 13.3% month-over-month and were flat year-over-year.

Key Takeaways for Buyers & Sellers

For Buyers: Increased inventory means more options, but home prices continue to rise. With mortgage rates steady, now could be a good time to enter the market before prices climb further.

For Sellers: Prices remain strong, but strategic pricing is key as more inventory gives buyers leverage. Homes are staying on the market slightly longer, so presentation and pricing matter more than ever.

The housing market is showing positive momentum heading into spring. Whether you're buying or selling, staying informed on market trends will help you navigate the opportunities ahead. 

Krista Freshour

Realtor

865-776-9608

Information provided by National Association of Realtors