The February housing market report shows this spring could provide home buyers with a greater supply of less expensive homes than in 2023. Realtor.com research finds the number of newly listed homes has significantly increased. The median listing price growth has slowed, and the share of home listing price reductions has risen to the highest February levels since 2019.
However, the overall housing inventory remains less affordable and scarcer than before the pandemic. Growth in the median home listing price slows as price reductions increase. The national median list price began to increase seasonally to $415,500 in February, compared to $49,500 in January, and the median list price remained relatively stable compared to the same time last year, growing by only 0.3%.
Homes spent 61 days on the market, which is 4 days shorter than in 2023 and more than 2 weeks shorter than before the COVID pandemic. Affordable home inventory grew compared to last year. On a typical day in February, 14.8% more homes were actively for sale compared to the same time in 2023. February is now the fourth consecutive month to show annual inventory growth. For the first 2 months of 2024, the inventory of homes actively for sale was at its highest since 2020.
In February, the growth in homes in the $200,000 to $350,000 price range outpaced all other price categories. Realtor.com predicts home buyers will have more choices than in recent years heading into the spring home buying season, especially with a greater selection of lower-priced homes compared to 2023. However, inventory is still not as plentiful as in previous years.
The total number of homes for sale, including pending listings, homes under contract but not yet sold, increased by 8.8% compared to February 2023, growing on an annual basis for the third month in a row after ending a 7-month streak of annual total listing declines. The total inventory of homes per sale also surpassed 2021 levels in February.
In recent months, home sales have been sensitive to mortgage rate fluctuations. After declining abruptly in November and December, mortgage rates in January and early February held steady at around 6.6%. This, coupled with less positive February pending data, could mean slower seasonally adjusted sales heading into the next few months. However, providing a boost to overall inventory, sellers turned out in higher numbers this February as newly listed homes were 11.3% above last year’s levels.
February marked the fourth month of increasing listing activity after a 17-month declining streak. Fannie Mae’s home purchase sentiment index, which measures buying and selling sentiment, showed that consumer sentiment toward housing in January hit the highest level in almost 2 years. Moreover, a survey high of 36% of respondents were optimistic that mortgage rates would go down in the next 12 months. In the housing data, we saw this improvement in sentiment translate to more homes newly listed on the market in February compared to 2023.