Homebuying activity faded in February.

Existing home sales declined 7.2% to a seasonally adjusted 6.02 million units in February from a month earlier, according to the National Association of Realtors (NAR). The number of sales was down 2.4% from the same month a year ago. January home sales figures were revised slightly down to 6.49 million from 6.5 million. The results came in much higher than analysts' expectations of a 6.2% month-over-month decline to 6.1 million units, according to Bloomberg consensus estimates.

“The latest decline is of larger magnitude than normal,” said Lawrence Yun, chief economist at NAR, noting that anything above 5% is considered a big swing.

Sales in all four regions of the U.S. fell, with the Northeast and Midwest leading the declines by recording a 11.5% and 11.3% drop, respectively. Sales fell 5.1% in the South and 4.7% in the West.

The dip in actual home sales should not have come as a surprise given the decline in pending home sales in the first month of this year and two months prior. Pending home sales, a leading indicator of the housing market, indicates when buyers first sign contracts. So the actual sale of a home usually takes place at least a month later.

“At a stroke, this would bring sales back into line with the mortgage applications numbers, allowing for the usual lag, as our next chart shows,” said Pantheon Macroeconomics in a research note prior to the results. “It's likely that pending sales in January were depressed by both bad weather and the Omicron wave, but any rebound will be brief, given the declining trend in mortgage demand.”

The median existing-home price for all housing types in February rose 15% to $357,300, up 15.0% from February 2021, as prices grew in each region. This marks 120 consecutive months of year-over-year increases, the longest-running streak on record.

"After 10 consecutive years of home price increases, the current U.S. median home sales price is more than double the $155,600 median in February 2012 when home prices began their current streak," said Realtor.com Chief Economist Danielle Hale in a press statement.

“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” said Yun. “Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.”

This week, the rate on a 30-year fixed mortgage, the most common for buyers, jumped to 4.16%, up from 3.85% a week ago, according to Freddie Mac. That is the highest level since May 2019.