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s the first day of spring arrives, a mixed bag of economic signals is casting a cloudy forecast over the real estate industry. On one hand, February's existing home sales rebounded from January's sluggish pace, with a 4.2% increase translating to an annualized rate of 4.26 million existing home sales. However, this still represents a 1.2% decline compared to last February's annualized rate of 4.31 million.

    Mortgage rates have remained relatively stable, hovering around 6.67%, despite a small uptick in recent weeks. This stability is a welcome respite for buyers, who are facing affordability challenges and economic uncertainty. According to Realtor.com Chief Economist Danielle Hale, the median existing-home sales price of $398,400 in February reflects a modest deceleration from last year's pace.

    The market may be shifting towards a buyer's market, with rising inventory providing more choices for buyers. Total inventory at the end of February was 1.24 million units, up 17% from a year ago, and unsold inventory supply stood at 3.5 months. This increase in supply could help spark sales, as evidenced by the rise in purchase applications, which are 6% higher than last year's numbers.

    Despite these positive signs, consumer confidence remains a concern. Eroding optimism could mean a slow start to the spring housing market, said Lisa Sturtevant, chief economist at Bright MLS. However, some agents and economists believe that the market is not as dire as it seems. "Some prospective buyers and sellers are still waiting for rates to drop, but others are jumping back in because it's clear the market isn't going back to where it was in 2020," said Heather Mahmood-Corley, a Redfin Premier agent in Phoenix.

    The key to reviving sales may lie in the balance between buyer and seller expectations. As Hale noted, "Despite the context of an expensive borrowing environment and stretched affordability for many shoppers, today's pick-up shows that a fair number of buyers and sellers are still able to find the middle ground that a transaction requires." With mortgage rates stable and inventory on the rise, the market may finally be shifting in favor of buyers.