US Existing-Home Sales Jump 8.7% in February Amid Mortgage Rate Decline

Existing-home sales surged in February, climbing to a seasonally adjusted annual rate of 4.27 million units, up 8.7% from the previous month, according to the latest data. The increase was fueled by a notable decline in mortgage rates, with the 30-year fixed rate falling to 6.7%—the lowest level since October 2023. This reduction eased borrowing costs for homebuyers and contributed to a 12.3% year-over-year gain in sales volume, the largest annual increase in over a year. The rebound comes after a dip in January and suggests that housing demand is regaining momentum, especially in regions with strong job growth and population inflows. Inventory levels remained tight, with 1.24 million homes available for sale—just 1.8 months of supply at the current sales pace—highlighting persistent supply constraints despite the sales uptick. The market's response was reflected in financial markets: the S&P 500 rose 0.9% on the news, with the real estate sector leading gains. The iShares U.S. Real Estate ETF (IYR) rose 1.6%, while the 10-year Treasury yield dipped to 4.21%, supporting a rally in long-duration assets like the iShares U.S. Treasury Bond ETF (TLT), which gained 1.2%. Meanwhile, the Bloomberg Commodity Index (BCOM) edged up slightly as crude oil (CL=F) traded near $78.30 per barrel amid shifting inflation expectations. The data may influence Federal Reserve policy expectations, with markets now pricing in a 68% probability of a rate cut by November 2026, up from 52% a week prior. The improved housing sector adds to broader economic resilience indicators, potentially shaping the central bank’s approach to rate normalization.