Despite tumbling mortgage rates, existing home sales plunged (the most since COVID) in January, with some blaming 'below-normal temperatures' despite The West suffering the biggest declines (and unaffected by the winter storms).

Consensus was for a modest 0.8% MoM decline in February (again despite an ongoing drop in mortgage rates) but sales actually surprised to the upside, rising 1.7% MoM. Perhaps even more notably, January's 8.4% MoM plunge was revised up to a slightly less crazy 5.9% MoM drop...

Source: Bloomberg

With the beat and upward revision, existing home sales were down just 1.45% YoY but SAAR topped 4mm (4.09mm) once again...

Source: Bloomberg

On the bright side, with mortgage rates at their lowest since 2022, existing home sales look set to continue to improve (unless Trump's war triggers more panic in rates)...

Source: Bloomberg

Mortgage rates fell at the end of last month to 6.09% after President Trump asked Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities to help lower home-financing costs.

The NAR’s monthly housing affordability gauge, which reflects changes in home prices, median income and borrowing costs, stands at the most-favorable reading since 2022.

“Housing affordability is improving, and consumers are responding,” NAR Chief Economist Lawrence Yun said in a statement.

“Still, there is a long way to go to return to pre-pandemic levels of transaction activity.”

The NAR report showed the median selling price rose 0.3% from a year earlier — one of the smallest advances since the pandemic housing frenzy — to $398,000 last month.

The inventory of previously owned homes increased 4.9% from a year ago to 1.29 million — the most for any February since 2020.

Market analysts see home sales climbing this year, with estimates ranging from 1.7% to 14%, according to a survey by Bloomberg late last year.