APPLETON, Wis. — Existing home sales across the United States showed a modest uptick in February, marking a small rebound to open the year, though persistent challenges like low inventory and fluctuating mortgage rates continue to temper optimism for the spring buying season.
According to the National Association of Realtors, sales rose 1.7% from January to a seasonally adjusted annual rate of 4.09 million units. However, this figure still represents a 1.4% decline compared to February 2025, reflecting ongoing softness in the housing market despite some positive economic indicators.
The data, released on March 10, 2026, captures transactions that were likely initiated in late 2025 or early this year, when 30-year fixed mortgage rates hovered around 6%, a notable improvement from the previous year's rates, which were about a full percentage point higher. This dip in rates provided a brief window of better affordability for buyers, but recent upticks in borrowing costs could dampen momentum as warmer weather typically spurs more activity.
"Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains," said Lawrence Yun, chief economist for the National Association of Realtors, in a statement accompanying the report. Yun highlighted that wage growth is now outpacing home price increases by nearly four percentage points, offering some relief to potential buyers.
Yet, Yun also pointed to broader economic disparities, noting that the U.S. has added more than 6 million jobs since 2019, but annual home sales have dropped by about 1 million units over the same period. This disconnect underscores how factors beyond employment, such as affordability and supply constraints, are holding back the market.
Inventory levels, a perennial pain point, saw only incremental improvement. At the end of February, there were 1.29 million homes available for sale, up 2.4% from January and 4.9% from the previous year. At the current sales pace, this equates to a 3.8-month supply, unchanged from the prior month. Industry experts consider a six-month supply as balanced, indicating that the market still favors sellers despite the uptick in listings.
Some of this growth in supply stems from homeowners who pulled their properties off the market last fall amid sluggish sales and waning consumer confidence. According to Redfin, a major real estate brokerage, nearly 45,000 homes that were delisted in 2025 were relisted in January 2026 — the highest January total since the company began tracking the metric a decade ago. This resurgence represents a record 3.6% of homes on the market that month.
"Inventory is growing, but sluggishly," Yun emphasized. He warned that if demand surges in the coming months and outstrips supply gains, home prices could climb further, exacerbating affordability issues and slowing transactions. Increasing supply, he argued, is crucial for stabilizing prices and boosting overall market health.
Prices themselves remained relatively flat, with the median sales price for existing homes reaching $398,000 in February, a mere 0.3% increase from the year before. This stability comes amid tight supply, which continues to prop up values even as buyer interest wanes at lower price points. Sales were particularly robust in the luxury segment, with properties listed at $1 million or more seeing stronger activity, while the entry-level market experienced sharp declines.
The time to close a sale has also lengthened, averaging 47 days on the market in February, up from 42 days a year earlier. This trend signals ongoing caution among buyers, who are navigating higher costs and economic uncertainty.
Demographic breakdowns offer a glimpse into shifting buyer profiles. First-time buyers accounted for 34% of sales, an improvement from 31% in February 2025, suggesting that younger or new entrants to the market are finding some opportunities amid the rebound. Investor purchases held steady at 16% of total sales, unchanged from the prior year, indicating that institutional interest remains consistent but not aggressive.
The February figures arrive against a backdrop of a housing market that has struggled to regain pre-pandemic vigor. Since the early 2020s, the sector has grappled with inflation-driven rate hikes, remote work shifts, and supply chain disruptions that limited new construction. While job growth and wage increases provide a foundation for recovery, experts like Yun stress that without more robust inventory expansion, the market risks stagnation.
Looking ahead, the spring season — traditionally the peak for homebuying — faces headwinds from rising mortgage rates, which have climbed back toward 7% in recent weeks. Realtors and analysts anticipate that any sustained rate relief from the Federal Reserve could unlock pent-up demand, but for now, the modest February gains serve as a cautious positive note.
In regional contexts, markets like Appleton have mirrored national trends, with local real estate agents reporting similar inventory shortages and price pressures. "We've seen a few more listings come online, but buyers are still hesitant," said one unnamed broker in the Fox Valley area, echoing sentiments from national data.
Overall, the February report paints a picture of a housing market inching forward but far from a full recovery. As economists monitor job reports and rate decisions, stakeholders from buyers to policymakers will be watching closely for signs of whether this small rebound can build into sustained momentum or if supply sluggishness will keep the sector in check.