Sales of existing homes jumped sharply in February. More 'For Sale' signs are up

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MICHEL MARTIN, HOST:

High mortgage rates kept the housing market on ice for most of last year, but now there are signs of a spring thaw. Sales of existing homes jumped sharply in February, and more for sale signs are finally sprouting up around the country. NPR's Scott Horsley has this report.

SCOTT HORSLEY, BYLINE: Homes changed hands at their fastest pace in a year last month, and there were also more homes on the market. Mortgage rates are still high, just under 7% this week, but perhaps the sticker shock is wearing off. Kat Robinson, who's vice chair of the Houston Association of Realtors, is happy to see home sales perking up.

KAT ROBINSON: We're really excited about the positive momentum, and it really brings an optimistic outlook for this spring home buying season.

HORSLEY: The median selling price last month top $384,000, a record high for February. The combination of high prices and high borrowing costs is still making it tough for people trying to get a first foot in the door of the housing market. First-time buyers accounted for just 26% of February home sales, matching an all-time low. Thai Hung Nguyen, who heads the Northern Virginia Association of Realtors, says he often goes over a household budget with first-time buyers to be sure they can swing the payments. If in doubt, he might point them towards a smaller house, try to identify some buyer assistance programs or suggest they wait six months and try to save more money.

THAI HUNG NGUYEN: It's really a long-term business relationship that I have for my clients, not a quick sale.

HORSLEY: For decades, buyer's real estate agents have been paid by home sellers, but that could change this summer under a legal settlement reached last week by the National Association of Realtors. Without that seller's subsidy, many buyers may end up having to pay their own agent out of pocket for the first time. Ryan Tomasello of Keefe, Bruyette and Woods says some buyers may have difficulty coming up with the cash.

RYAN TOMASELLO: It certainly will be an area of friction over the intermediate term, particularly for first-time homebuyers who arguably need professional representation most and are also the most cash strapped.

HORSLEY: Advocates say eventually, the new payment system should produce more competition and lower real estate commissions, and that, in turn, could result in slightly lower housing prices.

Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.