Home sales rebound, but supply remains 'sluggish'
Existing home sales rose in February, but 'sluggish' supply growth and rising rates threaten to dampen momentum in the housing market.
The National Association of Realtors (NAR) reported a 9.5% increase in existing-home sales for February, reaching a seasonally adjusted annual rate of 4.38 million. However, sales are still down 3.3% compared to the previous year. Limited inventory continues to be a major constraint, with the supply of existing homes rising slightly to 1.07 million, equivalent to a 2.9-month supply at the current sales pace. This "sluggish" supply growth is not keeping pace with demand. Rising mortgage rates are also posing a challenge. The 30-year fixed-rate mortgage averaged 6.78% in February, up from 6.64% the previous month, potentially cooling buyer enthusiasm in the coming months.
