US Existing-Home Listings Increase in February, but Higher Mortgage Rates Stifle Sales

On Thursday, Redfin reported that in the four-week period ending on Sunday, February 25th, new listings of US homes for sale increased 13% year-over-year. That is largest increase in nearly three years. Redfin also noted that total housing inventory is also improving. For the first time in nine months, the total number of homes for sale did not decline, with active listings flat from a year ago.

Finally, there’s some good news for homebuyers, who have been battling the dual challenges of low inventory and high mortgage rates for over a year. However, Redfin says that while today’s homebuyers have a few more homes to choose from, they are still facing historically high housing costs. The typical homebuyer’s mortgage payment is $2,671, just $47 below the record high set last October.

Redfin believes that high costs pushed pending sales down 8%, the biggest decline in five months, and mortgage-purchase applications declined for the fourth straight week.

But more house hunters are searching as more homes hit the market. Redfin’s Homebuyer Demand Index—a measure of requests for tours and other services from Redfin agents—is up 10% from a month ago to its highest level since September 2023. Pending sales could improve in the next few months if rates don’t increase further and new listings continue to rise.