The NAR data on existing home sales in February show a 4.2 percent increase to a seasonally adjusted annual rate of 4.26 million units, well above the consensus of 3.95 million units in the Econoday survey of forecasters. Sales in February are down 1.2 percent compared to 4.31 million units in February 2024. Home resales are concentrated in two regions. Sales rose a solid 4.4 percent in the South and a hefty 13.3 percent in the West. Both regions have suffered housing losses from natural disasters. Displaced households may be anxious to buy whatever the market conditions. Sales are down 2.0 percent in the Northeast and flat in the Midwest.

The February gain in sales is entirely due to the single-family home category. Sales of existing single-family homes is up 5.7 percent to 3.89 million units in February from January, and essentially unchanged from 3.90 million units a year ago. Multi-unit home sales are down 7.5 percent to 370,000 units in February from January and 9.8 percent below 410,000 units in February 2024. Now that supply has improved, it may be that potential homebuyers are less likely to look at the new home market, especially for first-time buyers. First-time buyers accounted for 31 percent of all sales in February, up from 28 percent in January. The average number of days a listing is on the market is 42 in February, up from 41 in January and 38 in February 2024.

Sales in February reflect buys closed, in most cases using mortgages taken out in December or January when rates were higher. The Freddie Mac average rate for a 30-year fixed rate mortgage was as high as 7.04 percent in the January 16 week. Rates near the 7 percent-mark tend to keep some homebuyers out of the market. However, improved inventory and moderation in prices is balancing that. With mortgage rates on the decline in February and March, sales of existing homes should benefit in the coming months.

The median price of an existing home is up 1.3 percent in February from January to $398,400 and up 3.8 percent from a year ago. The supply of homes available for sale remains at 3.5 months' worth in February from January and is more plentiful than 3.0 months in February 2024.

Sales are seen at an annual 3.95 million unit rate in February, down from 4.08 million in January, suggesting a weakening market with consumers increasingly cautious.

Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.

Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.

Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.