Is a jump in home sales a good sign for the housing market?

After several stagnant years, there are signs the limping housing market may finally be perking up.

Americans came out in greater numbers to buy homes in February, and March also could turn out to be a strong month, boosted by a brief dip in mortgage rates.

Sales of previously owned homes were up 1.7% in February, the National Association of Realtors announced Tuesday. Inventory is improving, which gives buyers more options – but also suggests sellers are gaining more confidence in the market. And prices rose slightly for the month but stayed relatively tame.

“Housing affordability is improving, and consumers are responding,” said Lawrence Yun, chief economist for the lobby group. “Still, there is a long way to go to return to pre-pandemic levels of transaction activity.”

In the years before the pandemic, sales ran in the mid-5 million range. But as mortgage rates shot up and the buying frenzy of the COVID-19 years crashed to a halt, they have plunged. If February’s pace of buying was maintained throughout 2026, it would come to $4.09 million. And while sales were stronger than in January, they were lower than one year earlier.

Housing observers were heartened when mortgage rates slipped below a key psychological threshold in February, bringing the national average to 5.98%. It didn’t last long – and surging inflation from the Iran war will keep nudging rates higher in coming weeks – but it may have sparked a mini buying spree in some areas of the country that reflects some pent-up demand on the part of buyers and sellers.

Bidding wars in the housing market again?

James Deskins is a broker with The HomeBuyer’s Advocate in metro Columbus, Ohio. In the first week of March, Deskins showed four houses to a client on a Friday. “At least two of them had multiple offers right away,” he said. He and his client bid 10% over asking on one of them and came in second place.

“So is that an indication of things to come?” he asked rhetorically. Or, he wondered, is it more likely a combination of lower borrowing costs – in his area, rates touched into the 5.6-5.7% range – plus the first nice weather in a while that had people itching to get out of the house and hit the market?

“The return of existing home sales to their 2025 average in February hints at an underlying pick-up, given that sales likely were weighed down by Winter Storm Fern, which struck in late January,” wrote Samuel Tombs, chief U.S. economist for Pantheon Macroeconomics, in an analysis after NAR’s report was released.

“The fall in the average 30-year mortgage rate since the start of the year suggests that existing home sales will rise to 4.4M soon, the highest level since mid-2022,” Tombs added.

Deskins has been working in real estate long enough to know that buyers generally reach a point where they decide “I’m not going to wait any longer,” whether or not that’s tied to a specific number or rate.

“Everything I see, hear, and read says that the market in 2026 will be better than in 2025, meaning more sales and a more balanced market,” he said. “We all hope that’s the case.”