- Home resales jumped 4.2% in February 2025, the biggest monthly increase in a year.
- The median existing-home price rose 5.7% year-over-year to $384,500.
- Mortgage rates held near 7%, yet buyer activity surged, defying expectations.
- Inventory remains historically low, intensifying buyer competition.
- Investor interest is ramping up, especially in high-growth and rental-ready markets.
Home Resales Jump in February — Is It Sustainable?
Home resales surged 4.2% in February, the highest monthly gain in over a year. This surprised analysts and homebuyers. This unexpected jump happened when mortgage rates were close to 7%, which goes against what usually happens when borrowing costs are high and the housing market slows down. With little housing available, ongoing demand, and more investor confidence, this housing market comeback makes you wonder: Will this last, or is it just for now?
Where the Surge Happened — National Numbers and Highlights
The National Association of Realtors says that home resales in the U.S. went up to 4.38 million in February, when you adjust for the time of year. This is a big increase from January’s 4.2 million. What’s really interesting is that this increase happened during a slow time of year and even with high mortgage rates.
This much housing market activity was not expected, and it’s the biggest monthly gain since February 2023. Experts thought growth would be small or stay the same because of the uncertain economy, worries about affordability, and people being tired of high rates. But, buyers are still more interested than thought.
Regional Contributions to Growth
Most of the country saw a big increase in resales, but some cities stood out. Places like Phoenix, Las Vegas, and parts of Florida had very big gains because investors are interested, prices seem good, and many buyers are moving from other states and countries. Cities in the Midwest with lower prices also helped the national growth, since homes are still affordable in some areas even though home values are mostly up.
The Mortgage Rate Paradox: Why Buyers Are Still Active
Even though 30-year mortgage rates were between 6.9% and 7.1% in February, people still bought homes. Usually, higher mortgage rates make buyers less interested, but 2025 is different.
This might be because of a few things that are related:
- Rates Don’t Scare Buyers Anymore: Buyers are used to higher rates now. They aren’t waiting for rates to go down, since that might not happen soon. They are deciding to buy now instead.
- Worry About Rates Going Higher: Many people are worried that rates might go up even more, so they want to buy now before it gets even harder to afford a home.
- Demand That Was Waiting: Many people who wanted to buy homes in 2023 and 2024 waited, so now there are many buyers ready to buy.
- Hoping to Refinance Later: Buyers are thinking they can buy a home now and then refinance to a lower rate later, if rates go down.
Even rich buyers are buying homes again, which adds to the competition and helps home resales all over the country.
A Key Driver: Inventory Shortages
Not many homes are available, and this is still a big reason why home prices are high and buyers have to decide quickly. The number of homes for sale is still much lower than usual, especially in popular city and suburban areas.
Implications of Low Inventory
- Many Offers: When there are fewer homes for sale, there are naturally more bidding wars. Homes priced under $500,000, especially in cities, are getting offers right away – sometimes without even seeing the home first.
- Homes Sell Faster: Homes are selling faster. In some areas, homes that are priced well are selling in less than 10 days.
- Prices Stay High: Because there aren’t many homes for sale, prices are staying high and going up, even if homes aren’t really more affordable.
Buyers have to deal with a market that is very competitive, so many are choosing to buy resales instead of waiting for things to be perfect.
Regional Market Focus: Spotlight on Las Vegas with Steve Hawks’ Insight
Las Vegas is always a good place to see what’s happening in the U.S. housing market, and right now it’s having a small boom. This is because of the same things happening nationally, but even more so.
Steve Hawks’ Perspective
Steve Hawks, a real estate agent in Las Vegas, says that investors are confident again, which is making the market busier in many areas. Hawks says:
- Investors Want Homes: Both big and small investors are buying properties because they think prices will keep going up.
- People Moving from Other States: Las Vegas is still attracting people from California, Arizona, and the Pacific Northwest because taxes are lower and it’s cheaper to live there.
- Not Many Affordable Homes: Homes under $450,000 are very competitive, and often get many offers within days.
In some neighborhoods, buyers are even getting rid of some protections they usually ask for when buying a home. This shows that people are feeling hopeful again, not worried like they were in the past few years.
Investor Behavior and Consumer Confidence
The part of the housing market where people invest is getting more active again.
Why Investors Are Returning
Many investors think real estate is a safe place to put money when prices are going up, and they are investing more because of some good signs:
- Prices Might Go Up: Home prices are expected to keep increasing, especially in places like Las Vegas, Dallas, and Atlanta where there aren’t many homes for sale.
- Rent Prices Are Good: Rent prices are staying steady, which makes rental properties a good investment.
- Rates Might Go Down: Experts think mortgage rates will down later in 2025, which would make homes worth more and make it easier to refinance for a profit.
Even regular people are investing again, often looking for smaller, less expensive homes or small apartment buildings to rent out for a long time or as vacation rentals.
Affordability Challenges Still Looming
Even though things are getting busier, it’s still hard to afford a home, especially for people buying their first home.
The Current Affordability Landscape
- Prices Going Up: The average price of an existing home in the U.S. went up to $384,500 in February, which is 5.7% higher than last year.
- High Mortgage Payments: With mortgage rates near 7%, monthly payments are high, and many people can’t afford them.
- Wages Not Going Up Enough: In most places, wages haven’t gone up as much as housing costs, so it’s even harder for buyers to afford homes.
People buying their first home are having a particularly hard time. They often don’t have enough savings, have credit problems, or can’t compete with investors who pay with cash.
What About New Construction? A Point for Buyers
New homes are still important in the housing market, especially when there aren’t many resales available. But recently, more buyers are going back to existing homes because of where they are located and because they can move in sooner.
Builder Incentives Still Matter
Many builders are still offering deals to attract buyers:
- Lower Mortgage Rates for a While
- Free Upgrades
- Home Warranties
But for buyers who need to move quickly or want to live in older neighborhoods, resale homes are better right now. The increase in home resales suggests that many buyers prefer speed, convenience, and location over new homes that are often further away.
Sustainability of the Resale Surge — Temporary Spike or New Norm?
Experts don’t agree on whether February’s increase means the market will keep going up, or if it’s just a short-term increase.
Factors Supporting a Continued Surge
- Rates Expected to Drop: If interest rates go down later in 2025, as expected, more buyers will likely become interested.
- Not Enough Homes for Sale: Because there aren’t many homes available, prices will stay up and homes will sell quickly.
- People Feeling More Confident: As the economy becomes more stable, both buyers and sellers are feeling more confident.
Challenges That Could Stall the Market
- Homes Too Expensive: Even buyers who really want to buy will eventually reach a limit on what they can afford based on their income and how much banks will lend them.
- Inflation Still High: If prices keep going up, the Federal Reserve might not lower rates as planned, which would keep mortgage rates high for longer.
- Job Market Weakening: If fewer people have jobs, that could quickly reduce buying power and investor interest.
Las Vegas Real Estate Outlook from Steve Hawks
Steve Hawks says that the next six months will still be competitive in Las Vegas, especially for homes under $500,000.
Where to Look in Vegas
- Average-Priced Areas: These areas are still popular with investors and first-time buyers.
- Homes That Have Been Listed for a While: Homes that haven’t sold in the first couple of weeks might be a chance to negotiate.
- Sellers Offering Deals: In some less busy areas, sellers are offering to lower rates for buyers for a while, upgrade appliances, or include home warranties to get offers.
Hawks suggests buyers should make a decision when they see a good opportunity, but not get into bidding wars that could cause financial problems.
Advice for Buyers in High-Rate Environments
Steve Hawks has some practical tips for dealing with high rates:
Tips for Today’s Buyers
- Buy Now, Refinance Later: Buy a home now, and then change the loan when rates get better.
- Focus on Home Value, Not Just Rate: A good neighborhood and stable prices are more important than worrying too much about the rate right now.
- Look at Different Lenders: Credit unions or smaller banks might offer better deals or be more flexible with who they lend to.
Renting might seem safer, but with rent prices going up, owning a home can still be better in terms of monthly costs and long-term investment.
Recommendations for Sellers and Homeowners
If you are thinking about selling your home, now is still a good time.
Seller Advantages in 2025
- Many Buyers: Because there aren’t many homes for sale, there is still a lot of demand, especially for homes that are clean and ready to move into.
- Can Ask for Good Prices: Sellers can ask for higher prices if their home looks good and is priced right.
- Quick Sales: Be ready to move quickly—homes are selling fast, sometimes in less than a week.
Spending money on repainting, landscaping, and small improvements can increase your sale price and help your home sell faster.
Investor Outlook: Where’s the Opportunity in 2025?
For investors, 2025 has some good opportunities, but you need to be smart about where you invest.
Strategic Moves for Investors
- Buy and Rent in Growing Areas: Buy properties in good school districts or areas with many jobs for long-term rental income.
- Apartment Buildings: Duplexes and fourplexes can give better returns and are less likely to be empty.
- Time to Sell: With rates expected to go down later this year, selling in early to mid-2026 might give you the most profit.
Flippers should focus on less expensive homes that first-time buyers can afford since they can’t afford new homes and want homes that are already fixed up.
Final Thoughts: Watching the 2025 Macro Indicators
Even though resales went up a lot in February, whether this lasts depends on the overall economy.
What to Monitor
- Federal Reserve Actions: Any changes in interest rate policy will greatly affect affordability and buyer demand.
- New Home Construction: Building more new homes is important to make homes more affordable in the long run.
- Jobs and Wages: Continued job growth will help people be able to buy homes.
As always, the housing market reflects the economy as a whole—and general advice doesn’t always work for everyone. Getting help from experienced people like Steve Hawks can help buyers, sellers, and investors make good decisions in any market.
Citations
- National Association of Realtors. (2025, March). Existing-Home Sales Report – February 2025.
Federal Reserve. (2025, March). FOMC Statement Analysis.