H
ome sales are lagging behind last year's pace, with pending sales down 3.6% compared to February 2024. Despite a slight improvement from January, the market remains sluggish due to high prices and economic uncertainty. However, there are signs of hope in the new home market.

    Inventory is growing, but so are home prices, making it difficult for first-time buyers to enter the market. In some areas, new homes could be an easier entry point, with strong sales reported for properties priced between $300,000 and $400,000.

    Mortgage rates remain stable, averaging 6.65% this week, but affordability is a major concern. The typical homebuyer's monthly housing payment has hit an all-time high of $2,807, making it harder for buyers to afford homes.

    New home sales are bucking the trend, with a 5.1% increase in February compared to last year. This growth is driven by affordable new inventory and lower costs of ownership for new homes. Mortgage applications also showed some momentum, with purchase applications up 7% from last year.

    While economic uncertainty remains a wild card due to tariffs and potential inflation, the market is showing signs of resilience. Builders are prioritizing delivering more affordable new inventory, making it easier for buyers to enter the market.