Housing supply is finally rebounding as sellers get used to elevated mortgage rates, but it’s not rebounding enough to curb home price growth. High housing costs mean many house hunters remain hesitant to commit.
New listings jumped 3.8% month over month on a seasonally adjusted basis in February—the biggest increase in six months—to the highest level since September 2022. They were up 14.8% year over year, the largest annual gain since May 2021.
Active listings, or the total supply of homes for sale, hit the highest level in a year. They climbed 0.8% from a month earlier on a seasonally adjusted basis, and were little changed (-0.1%) from a year earlier—the smallest annual decline in months.
New listings rose fastest from a year earlier in Texas and active listings rose fastest in Florida—the two states that have been building the most homes. In Florida, condo listings in particular are contributing to the jump in supply amid a surge in HOA and insurance fees.
“The housing market is nothing like it was two years ago during the pandemic homebuying frenzy, but it’s better than it was last year. It’s coming back,” said David Palmer, a Redfin Premier real estate agent in Seattle. “Sellers who were on the fence in 2023 are now listing. They’re more used to elevated rates now. There still aren’t enough listings to quench pent-up buyer demand, but it’s getting better.”
Nationwide, housing supply is on the rise because the “lock-in effect” is easing; eventually, homeowners who have been holding on to their ultra-low mortgage rates simply have to move.
“February was a mixed bag for the housing market and the economy,” said Redfin Economics Research Lead Chen Zhao. “Housing supply is finally starting to recover in a meaningful way, which is great news for buyers who for months have been competing for a tiny pool of homes for sale. Still, many house hunters are hesitant to pull the trigger because mortgage rates and home prices remain elevated.”
Mortgage-purchase applications slid in February as mortgage rates ticked back up after dropping in December. The average 30-year-fixed mortgage rate was 6.78% last month, up from 6.64% in January. Mortgage rates will likely remain elevated a bit longer than expected after this week’s inflation report came in hotter than anticipated.
Home sales rose 0.5% month over month on a seasonally adjusted basis in February, and fell 3.5% year over year.
The median U.S. home sale price climbed 6.6% year over year—the biggest uptick since September 2022—to $412,778. Please note that home price data is not seasonally adjusted, which is why we focus on year-over-year changes for this metric.
Prices continue to rise because despite the recent uptick in listings, there’s still not enough supply to meet demand. Both new listings and active listings remained far below pre-pandemic levels in February.
“If you price your home reasonably, buyers will show up. If you don’t, buyers will wait for you to drop the price,” Palmer said. “I recently listed an estate sale fixer upper for $550,000 and it got 14 offers, sold for $75,000 over the asking price and the buyer waived every contingency.”
In Seattle, 77.4% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. It took the top spot from Rochester, which has held that title for months. The typical home that went under contract in Seattle did so in 11 days (versus a national median of 48 days).
Note: Data is subject to revision
Data in the bullets below came from a list of the 91 U.S. metro areas with populations of at least 750,000. Select metros may be excluded from time to time to ensure data accuracy. A full metro-level data table can be found in the “download” tab of the dashboard in the monthly section of the Redfin Data Center. Refer to our metrics definition page for explanations of metrics used in this report. Metro-level data is not seasonally adjusted. All changes below represent year-over-year changes.
