Existing-Home Sales Rise 6.2% in February Amid Improved Affordability, Signal Stronger Housing Demand

Existing-home sales in the United States rose to a seasonally adjusted annual rate of 4.21 million units in February, up 6.2% from January’s revised level of 3.96 million, according to new data. The increase follows a prolonged period of subdued activity, with sales hovering below 4 million in late 2024 and early 2025. Stronger demand was supported by a decline in the 30-year fixed mortgage rate to 6.4%—the lowest since mid-2024—improving affordability for first-time buyers and those looking to trade up. The rebound in housing activity reflects broader economic resilience, with job growth and moderate inflation contributing to stabilized consumer sentiment. The median home price rose to $432,000, a 3.1% year-over-year increase, signaling persistent supply constraints despite rising sales. States such as Texas, Florida, and Arizona led the gains, with transaction volumes up 12% and 9% respectively, driven by population inflows and favorable climate and tax environments. Financial markets reacted cautiously to the data. The yield on the 10-year Treasury note rose to 4.62% from 4.55% the prior week, indicating investors are pricing in prolonged higher-for-longer interest rates. The CME FedWatch Tool now assigns a 58% probability to a rate cut in the second half of 2026, down from 67% in January. The S&P 500 Financials Sector index gained 1.4%, reflecting expectations of stronger loan demand and potential margin expansion for mortgage lenders. The increase in home sales also influenced related asset classes: U.S. long-duration Treasuries saw modest losses, with the 30-year bond (ZN=F) down 0.8% on the week. The VIX index rose 4.3% to 18.7, indicating slightly elevated volatility in equity markets amid rate uncertainty. Energy markets were only marginally affected, with crude oil (CL=F) trading flat at $78.30 per barrel, as housing data had limited direct impact on commodity demand.