Home sellers gained the advantage in February’s housing market, as existing-home sales climbed 4.2% month over month. According to the National Association of Realtors (NAR), two of the key sales regions in the country recorded growth in sales, while one region remained steady and one declined. Sales were down slightly year over year; however, there are signs of pent-up demand. Sellers with competitive pricing and a sound sales strategy can attract more offers from these potential buyers.

Home Prices Continue to Climb

Home prices have climbed for the past 20 consecutive months, and February was no exception. The median existing-home sales price increased 3.8% year over year to $398,400. What’s more, every sales region in the country reported price gains. According to Lawrence Yun, chief economist for the NAR, each percentage point increase in home prices added roughly $350 billion in homeowner equity. These price gains will allow sellers to maximize their return and give potential homebuyers a reason to enter the market.

Inventory Is Growing, Along with Demand

Potential buyers have more choices in the current housing market, with total housing inventory rising 5.1% month over month in February to 1.24 million homes. This was up 17% year over year. At the current sales pace, the market held a 3.5-month supply, unchanged from a month earlier but up from a 3.0-month supply a year earlier. With steady mortgage rates helping to fuel buyer demand, strategic sellers should consider listing their homes now before inventory expands further.

Who’s Buying Right Now?

Steady mortgage rates are enticing more first-time buyers to enter the market. This group accounted for 31% of all sales in February, up from 28% a month ago and 26% a year ago. Cash buyers, meanwhile, represented 32% of all buyers, up from 29% a month earlier. Investors and second-home buyers were responsible for 16% of all transactions in February, down from 17% in January and 21% in February 2024. Distressed sales, including foreclosures and short sales, held steady at 3% of all transactions. With more first-time buyers and fewer investors in the market, competitive pricing and home preparation are needed to attract offers. The average property remained available for 42 days in February, longer than both a month earlier (41 days) and a year earlier (38 days).

Mortgage Rates and Market Outlook

By the middle of March, the 30-year fixed-rate mortgage averaged 6.65%, slightly higher than the 6.63% rate of a week earlier but lower than the 6.74% rate of a year earlier. Buyers are adjusting to higher mortgage rates, and with gains in home equity, many are viewing owning a home as a good investment. What’s more, mortgage default rates are at historic lows, supporting stable home values. These factors combined may make the current market ideal for home sellers.

Regional Sales Breakdown

• Northeast: Existing-home sales annual rate of 500,000; a decrease of 2% from January 2025 but an increase of 4.2% from February 2024. The median sales price of $464,300 represented a 10.4% increase from February 2024.

• Midwest: Existing-home sales annual rate of 1 million; unchanged from January 2025 but an increase of 1% from February 2024. The median sales price of $295,500 represented a 5.8% increase from February 2024.

• South: Existing-home sales annual rate of 1.91 million; an increase of 4.4% from January 2025 but a decrease of 4% from February 2024. The median sales price of $358,800 represented a 1.9% increase from February 2024.

• West: Existing-home sales annual rate of 850,000; an increase of 13.3% from January 2025 but unchanged from February 2024. The median sales price of $614,600 represented a 3.6% increase from February 2024.