Existing home sales in the US jumped 14.5 per cent in February to an annual rate of 4.58 million units, the National Association of Realtors said on Tuesday.

The figures are seasonally adjusted.

The surge in sales reversed a 12-month loss in existing home sales. the 14.5 per cent increase was the biggest since the July 2020 pandemic. At that time, sales were up 22.4%.

Sales of single-family homes, in particular, were the highest since NAR began tracking the figure in 1999.

Economists surveyed by the Wall Street Journal expect existing home sales to remain flat at 4.2 million.

Compared to February 2021, home sales are still down 22.6 per cent.

The median price of existing homes fell slightly to $363,000 in February.

This was the first decline in over a decade. Falling home prices in the Northeast and West dragged down the overall numbers.

The number of homes on the market was flat at 980,000 in February.

On a month of supply basis, there was a 2.6 month supply of homes for sale in February, down from January. A four or five month supply is more normal before a pandemic.

Homes stayed on the market for an average of 34 days, up from 33 days in January. The average time homes stayed on the market prior to the pandemic was one month.

Most regions saw a surge in existing home sales, with the West leading the way with a 19.4 per cent increase. the NAR said the Silicon Valley region could see more pain, which will show up in future data.

The South reported a 15.9 per cent increase in sales in February, followed by the Midwest at 13.5 per cent and the Northeast with a 4 per cent increase.

However, sales are still down nationwide compared to the previous year.

All-cash transactions accounted for 28 per cent of all transactions. Some 27 per cent of homes were sold to first-time buyers, down from the previous month.

The proportion of individual investors or second home buyers rose from 16 per cent in January to 18 per cent in February.

As seen in the jump in home sales in February, there is clearly a large amount of pent-up demand in the housing market. The fall in mortgage rates may have boosted sales by pushing homebuyers to leap into buying homes.

But meeting supply is by far the biggest problem. As Mark Fleming of First American puts it, "you can't buy something that's not for sale". Many homeowners are reluctant to list their homes, which could push people into the new home market.

Furthermore, it is unclear how long this recovery will last. Mortgage rates have now picked up, with the average 30-year rate at 6.67 per cent according to Mortgage News Daily, and the economic outlook looks bleak - both of which are leading to a possible drop in sales next month.

What realtors are saying. "I'm surprised," said Lawrence Yun, chief economist for the National Association of Realtors." Recovery is strengthening, [but] if mortgage rates are too high, maybe they'll deflate again ...... [and] mortgage rates have a big impact."

He adds that inventory levels remain at historically low levels, "and as a result, there are multiple offers on many properties."

Yun noted that existing home sales, which typically make up 90 per cent of the market, are losing market share to new homes. There are as many new homes on the market as existing homes, he said.

Stocks rose in early trading on Tuesday as the yield on the 10-year Treasury note TMUBMUSD10Y, 3.586 per cent, rose to over 3.58 per cent.