U.S. Home Sales Rebound in February Amid Declining Mortgage Rates

Existing-home sales in the United States increased by 8.2% in February compared to January, according to preliminary data, marking the first significant rebound since late 2025. The surge was largely attributed to a sustained decline in mortgage rates, with the 30-year fixed rate averaging 6.4%—down from 6.8% in January and the lowest level since October 2024. This easing trend made homebuying more affordable and encouraged long-dormant buyers to re-enter the market. The improvement in housing activity comes amid broader economic stabilization, with the yield on the 10-year Treasury note (^TNX) settling at 4.25% in early March, reflecting reduced expectations for aggressive Federal Reserve rate hikes. Lower long-term rates have boosted investor appetite for real estate investment trusts (REITs), with the iShares U.S. Real Estate ETF (IYR) posting a 3.7% gain over the month. Financial sector exposure also benefited, as the Financial Select Sector SPDR Fund (XLF) rose 2.1%, signaling improved confidence in lending and mortgage-related revenues. The February rebound reflects a 12.5% year-over-year increase in sales volume, suggesting stronger underlying demand despite previous rate pressures. Economists note that while inventory remains constrained—up only 4.8% from last year—improving affordability is helping bridge the gap between supply and demand. Analysts expect continued momentum into Q2 if mortgage rates remain below 6.5%. The uptick in sales activity is likely to bolster consumer discretionary spending and support home improvement and construction-related industries. Regional banks, which are key mortgage lenders, may see improved loan volumes and net interest margins, potentially driving further gains in sector-specific indices.