• Existing homes sales increased by 9.5% in February to a seasonally adjusted annual rate (SAAR) of 4.38M, but are still down 3.3% from February 2023, according to the National Association of Realtors (NAR).
• Total housing inventory at the end of February increased to 1.07 million units, up 10.3% from a year ago.
• The median existing-home sales price in February was $384,500, 5.7% higher than a year ago.

What happened: Existing home sales increased again in February to mark the highest monthly increase in the past 12 months. According to Zillow data, the flow of existing homes coming onto the for-sale market rose 20% last month and sales are rising along with supply. The number of homes for sale has also increased when compared to last February.

What Zillow Senior Economist Orphe Divounguy thinks: Last year, buyers returned to the housing market ahead of the spring season, but many sellers opted to stay on the sidelines. This year, more sellers are back well ahead of the spring shopping season. Because sellers are returning to the housing market, the gap between supply and demand is closing and for-sale inventory is rising again. Higher inventory bodes well for housing sales this spring.

Despite these improvements, the housing market remains supply constrained. The typical home that sold in February was on the market for less than 30 days. Unsold inventory sits at just 2.9-month supply compared to 2.6 months in February 2023. The lack of existing homes on the market provides an opportunity for builders to fill the gap, and many are offering incentives such as rate buy-downs to make the math work for prospective buyers.