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Economic Score 65 Cautiously optimistic

Home Sales Rise in February Amid Persistent Mortgage Rate Pressures

Mar 10, 2026 14:37 UTC
CL=F, ^VIX, TLT
Short term

U.S. existing-home sales increased 3.8% month-over-month in February, reaching a seasonally adjusted annual rate of 4.18 million, according to new data. However, rising mortgage rates continue to weigh on affordability and long-term momentum.

  • Existing-home sales rose 3.8% MoM to a seasonally adjusted annual rate of 4.18 million in February.
  • 30-year fixed mortgage rates averaged 7.2% in February, up from 6.9% in January.
  • Median home price reached $422,000, exacerbating affordability challenges.
  • TLT declined 1.6% in February as long-term Treasury yields climbed to 4.45%.
  • VIX rose to 17.8, indicating increased market volatility.
  • MBS indices have declined 2.1% YTD, reflecting investor caution on rate-sensitive assets.

Existing-home sales posted a modest rebound in February, rising to a seasonally adjusted annual rate of 4.18 million, up from 4.03 million in January. This marked the first monthly gain in four months and signaled some resilience in the housing market despite ongoing economic headwinds. The median U.S. mortgage rate for a 30-year fixed loan climbed to 7.2% in February, up from 6.9% in January, according to Freddie Mac. This rise has tightened borrowing conditions, dampening demand among first-time buyers and limiting inventory turnover. High rates are particularly impacting affordability, with the typical home sale price increasing to $422,000, outpacing income growth. The housing sector’s performance has ripple effects across financial markets. The 10-year Treasury yield rose to 4.45%, pressuring long-duration assets like the iShares 20+ Year Treasury Bond ETF (TLT), which declined 1.6% in the month. Meanwhile, the CBOE Volatility Index (VIX) edged upward to 17.8, reflecting heightened investor caution around rate policy and economic uncertainty. The combination of elevated rates and softening consumer confidence is affecting mortgage-backed securities (MBS), which are sensitive to prepayment risk and interest rate volatility. Investors are adjusting exposure, with the Bloomberg U.S. MBS Index showing a 2.1% decline year-to-date. Financial institutions with significant residential lending portfolios may face margin compression if refinancing activity remains subdued.

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