February 2026 National Housing Market Update

National Real Estate Market Update – February 2026

The U.S. housing market saw modest growth in February, with existing-home sales increasing 1.7% month-over-month, according to the National Association of REALTORS® (NAR). Sales reached a seasonally adjusted annual rate of 4.09 million, signaling gradual improvement as the market moves toward the spring season.

However, sales were down 1.4% year-over-year, showing that the market is still adjusting after several years of elevated mortgage rates and limited inventory. Month-over-month sales rose in the Midwest, South, and West, while the Northeast saw a slight decline.

NAR Chief Economist Lawrence Yun noted that improving affordability is beginning to influence buyer behavior.

“Housing affordability is improving, and consumers are responding,” Yun said. “Wage growth is now outpacing home price growth, and mortgage rates are measurably lower compared to a year ago.”

Inventory Gradually Expands

Housing supply continued to improve slightly in February, though inventory remains relatively tight compared to historical norms.

Total housing inventory: 1.29 million homes
Month-over-month change: +2.4%
Months of supply: 3.8 months (unchanged from January, up from 3.6 months last year)

While more homes are entering the market, supply growth remains gradual. If buyer demand increases faster than inventory, prices could face renewed upward pressure later in the year.

Home Prices Continue to Rise

Home values remained stable, continuing a long stretch of steady price appreciation.

National median existing-home price: $398,000
Year-over-year change: +0.3%
32nd consecutive month of annual price increases

While price growth has slowed compared to the rapid increases seen during the pandemic market, steady appreciation continues to support homeowner equity across the country.

Single-Family vs. Condo Market

Single-Family Homes

Sales increased 2.5% month-over-month
Median price: $401,800 (+0.2% YoY)

Condominiums & Co-ops

Sales declined 5.3% month-over-month
Median price: $358,100 (+0.9% YoY)

Single-family homes continue to make up the majority of housing activity, while the condo market has seen slightly softer demand.

Regional Trends to Watch

South:
Sales rose 1.6% month-over-month and 0.5% year-over-year, continuing to show stability and steady demand.

Midwest:
Sales increased 1.1% month-over-month, though they remain lower than last year as affordability remains a factor.

West:
Sales jumped 8.2% month-over-month, one of the largest regional gains, though year-over-year activity remains slightly lower.

Northeast:
Sales fell 6.0% month-over-month and 4.1% year-over-year, largely due to ongoing supply challenges and higher price points.

Mortgage Rates Continue to Ease

Mortgage rates have continued trending lower compared to a year ago, helping gradually improve affordability.

Average 30-year fixed mortgage rate: 6.05%
January: 6.10%
February 2025: 6.84%

While borrowing costs remain higher than historic lows, the improvement in rates—combined with stronger wage growth—is helping restore some purchasing power for buyers.

What This Means for East Tennessee

Many of the trends shaping the national housing market are also visible across East Tennessee, particularly as we approach the busy spring season.

Key takeaways locally include:

Buyer activity is gradually increasing, especially as mortgage rates stabilize.
Inventory is improving slowly, giving buyers slightly more options than in recent years.
Home prices remain stable, supported by steady demand and continued in-migration to the region.
Well-prepared homes are still attracting strong interest, particularly in desirable Knoxville-area neighborhoods.

East Tennessee continues to benefit from strong job growth, lifestyle appeal, and relatively affordable housing compared to many major markets, which keeps demand resilient even as the national market adjusts.

Looking Ahead to the Spring Market

With affordability improving, mortgage rates lower than last year, and the spring market approaching, housing activity is expected to continue gradually strengthening throughout 2026.

However, inventory growth will remain a key factor. If demand picks up significantly while supply remains limited, home prices could continue to climb in many markets.

For both buyers and sellers, staying informed about market conditions—and understanding how national trends impact the local market—will be essential as East Tennessee moves deeper into the 2026 housing season.

Krista Freshour

Realtor

865-776-9608