U.S. Existing Home Sales (February 2026)

Existing home sales improve in February

• Existing home sales rose 1.7% month-on-month (m/m) to 4.09 million units (annualized) in February – well above the consensus forecast calling for a decline to 3.85 million. January's pullback was also revised up, with activity that month falling 5.9% instead of 8.4% as initially reported. 
• Sales in the single-family segment rose 2.5% (m/m), while sales in the smaller condo/co-op segment fell 5.3%. Sizable improvements were recorded across all but one of the four Census regions, with activity up 8.2% in the West, 1.6% in the South, and 1.1% in the Midwest. Sales fell 6% in the Northeast.
• Inventory levels (1.29 million) up 2.4% from January and 4.9% from February 2025. Measured at the current sales rate and seasonally adjusting, unsold inventory stood at 4.2 months' supply, the same as in the two months prior, but up from 4.0 in February 2025.
• Higher inventories have meant less upward pressure on house prices. The median home price was up 0.3% year-on-year – a mild deceleration from 0.4% in the two months prior. While showing tepid growth in year-on-year terms, the median seasonally adjusted price recorded mild declines on a month-to-month basis in both January and February (seasonal adjustment performed by TD Economics). 

Key Implications

• February’s moderate rebound in home sales offers an early stabilization signal following January’s sharp pullback. The upward revision to January adds to the more constructive tone of the report, though it does little to change the broader picture of sales activity remaining subdued. The near term environment is likely to remain challenging, with recent geopolitical developments indirectly weighing on housing demand by raising inflation concerns and long term Treasury yields. The 10 Year yield has firmed in recent weeks, pushing mortgage rates roughly 15 basis points above their recent cycle low to above 6.1%, adding to affordability pressures.
• While geopolitical risks have added noise to the outlook, assuming the recent conflict is short lived, these effects should prove temporary. As uncertainty fades, the focus is likely to shift back squarely toward domestic fundamentals. In that vein, we expect sales to grind modestly higher as labor market conditions improve and mortgage rates edge lower over time. Still, with affordability stretched and resale supply constrained, a major turnaround this year appears unlikely. The U.S. administration is considering several measures aimed at supporting housing affordability, which could present some upside risk to the outlook (for more detail, see our report here). 

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