Sharp Dive in February Home Sales Across U.S. Driven by Soaring Mortgage Rates, Northeast and Midwest Hit Hardest

Home sales took a sharp dive in February, particularly in the Northeast and Midwest regions of the United States, as elevated mortgage rates deterred potential buyers. Single-family home sales in the Northeast plummeted by 31.5%, while the Midwest saw a decline of 2.4%. Nationally, new home sales dropped by 0.3% to 662,000, below the Bloomberg economists’ forecast of 677,000. The South experienced a slight increase of 3.7%, and the West saw a modest rise of 2.3%. Analysts attribute the disappointing numbers to the impact of high mortgage rates, which have surged to nearly 6.9% as of March 21. The rise in rates has contributed to a decline in home prices, with the median sale price of a single-family home dropping to about $400,000, the lowest since June 2021. Despite the downturn in new home sales, the existing homes market saw a surge in sales last month, fueled by falling mortgage rates. However, the recent uptick in borrowing costs is expected to suppress activity in the coming months. Analysts anticipate rates to fall by the end of the year, potentially sparking a rebound in the new homes market.

Home Sales Collapse in Several States (newsweek.com)