"It will be very interesting to observe what's going to happen in the coming months as mortgage rates make a much more meaningful jump," said Lawrence Yun, chief economist for the Realtors.
That significantly missed analysts' expectations of 6.13 million units. Sales were 2.4% lower compared with the same month a year ago. Rising mortgage rates likely played a role in the underwhelming numbers. While some of the sales figures were likely affected by rising rates, the bigger issue in housing today is very low supply. More homes came on the market in February compared with January, but there were just 870,000 homes for sale at the end of the month, a 15.5% drop year over year. At the current sales pace, that represents a 1.7-month supply, which is close to an all-time low.
Competition for the limited supply of homes for sale is increasingly fierce again. Homes are going under contract in just 18 days. Nationwide, 68.6% of home offers written by Redfin agents faced bidding wars, according to a new, seasonally adjusted report from the real estate brokerage. That was the highest level since Redfin began counting in April 2020.