AUSTIN, TX — Realtor.com®’s February Monthly Housing Report shows shifting activity in the housing market, with newly listed homes increasing 4.2% year-over-year and price reductions reaching 16.8%, up from 14.6% in February 2024. These changes highlight how sellers are adjusting to current market conditions even amid ongoing economic uncertainties.
“While rates remain elevated, we are beginning to see green shoots in the market as sellers grow tired of waiting for significant changes in interest and mortgage rates,” said Danielle Hale, Chief Economist at Realtor.com®. “If these trends continue for the next few months, we could see a market that is entering into more balanced terrain, with rising inventory and a potential future slowdown in price growth. While the market does not look like it did before the pandemic, we are moving away from the ultrahigh demand, low inventory period we saw in 2021 and 2022.”
Key Housing Metrics
The median listing price dipped below last year’s level to $412,000, reflecting an increase in the share of smaller homes being listed. At the same time, homes stayed on the market an average of 66 days, 11 fewer days than pre-pandemic February averages but longer than in February 2024.
Regionally, the South and Midwest saw the largest slowdowns in sales pace, with listings lingering an additional seven to eight days compared to last year.
Impact of Federal Workforce Changes
Despite concerns over recent federal workforce reductions, the report found no clear evidence of significant impacts on housing markets tied to government employment. Washington, D.C., which has a concentrated federal workforce, followed national trends with an increase in price reductions of 2.3 percentage points compared to last year.
The report noted, however, that potential ripple effects could emerge in the coming months. “The health of a local housing market is often tied to the health of the local labor market. Federal workforce reductions could have ripple effects on housing markets with a high concentration of government employees, and the degree of the impact is likely to depend on the health of the private sector in these markets and its ability to provide new opportunities,” the report stated.
Outlook
With elevated mortgage rates continuing to influence the market, buyers and sellers alike are treading cautiously. The market’s increased inventory and price adjustments suggest a gradual shift toward more balanced conditions, but economic uncertainties, particularly in regions sensitive to federal employment changes, remain critical factors to watch as the spring selling season unfolds.
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