Glimmer of hope for US economy as housing market activity ticks up – but one state
Realtors, homeowners, economists, and Americans alike are all collectively taking a sigh of relief as last month’s housing data rolls in.
According to Zillow’s February report, there is hope for the United States housing market after all.
Indeed, a significant spike in housing activity suggests the market is regaining confidence and perking up as Spring approaches.
Home values increased in February for the first time in seven months, and existing home sales rose 1.8 percent compared with a year earlier.
The February uptick in sales suggests that January’s weaker numbers were likely affected by severe winter weather.
Lower mortgage rates have boosted purchasing power by roughly $30,000 for a median-income household over the past year, and the typical mortgage payment – excluding taxes and insurance – has fallen 7.7 percent year over year.
Together, these developments offer an early sign that the housing market may be beginning to recover after hovering near its low point since 2023.
However, the bigger picture doesn’t reflect the reality of many of America’s biggest cities – and some are not experiencing the same spark being felt on a national level.
A significant spike in housing activity suggests the market is regaining confidence and perking up as Spring approaches
Of the 50 largest metros, only seven saw month-over-month home value declines. However, the cities that did see drops paint a very clear a picture: Texas is in trouble.
Houston, San Antonio, and Austin all saw month-over-month drops – a bleak sign for a state that has been struggling to rally after its post-pandemic housing hangover.
All three cities became hotspots for transplants during Covid, as people moved to places with good weather and less grueling taxes.
Builders got to work, developing properties to meet the demand – but now, the hype has died down and these Texan metros have too many homes and not enough buyers.
Austin has been hit especially hard, as of January, it was the strongest buyer’s market in the country – meaning it had the biggest imbalance between supply and demand, leaving sellers with no power.
The other four metros to round out the metros seeing home values drop in February were Pittsburgh, Las Vegas, Nashville, and Buffalo.
Dallas was flat, as were Miami and Orlando – two Florida cities that saw similar pandemic pipelines in their housing markets.
Elsewhere in the data, new listings declined 3 percent year over year in February, likely reflecting continued disruptions from winter storms.
Austin has been hit especially hard, as of January, it was the strongest buyer’s market in the country
Houston, San Antonio, and Austin all saw month-over-month drops – a bleak sign for a state that has been struggling to rally after its post-pandemic housing hangover (pictured: homes outside of Austin)
Housing inventory continues to slowly build. There were about 1.12 million homes on the market nationwide in February, 5 percent more than a year earlier and slightly higher than January levels.
Home sales also strengthened during the month.
Roughly 239,910 homes were sold in February – up 1.8 percent from a year earlier and 13 percent higher than in January.
Newly pending listings, which track homes that went under contract during the month, rose 3.5 percent compared with last year and jumped 11.1 percent from January, another sign of improving market activity.
Competition among buyers has cooled somewhat compared with last year but remains solid. Homes spent a median of 28 days on the market before going under contract in February – four days longer than a year earlier but much faster than January.
If mortgage rates remain below 6 percent for an extended period, it could provide a psychological lift that encourages more buyers and sellers to reenter the market.