The housing market just saw its biggest inventory spike in nearly 3 years

• New listings for homes for sale climbed 12.9% year-over-year in February, Redfin data shows.
• Total inventory also improved, as total homes for sale did not decline for the first time in nine months.

The frozen US housing market is showing some signs of loosening this month.

In the four weeks to February 25, new listings of US homes for sale surged 12.9% compared to the same time a year ago, hitting 79,354, according to data from Redfin. That's the sharpest spike in nearly three years.

Total inventory, meanwhile, remained flat year-over-year, the first time in nine months the figure didn't move lower.

Redfin's Homebuyer Demand Index, which measures requests for tours and services from Redfin real estate agents, also climbed 10% compared to last month, and is at its highest level since last September.

"House hunters are out there, and competition picks up every time mortgage rates decline a bit," said Brynn Rea, a Redfin agent in Spokane, Washington. "I'm telling buyers who can afford it to look now while they have more breathing room and less competition. They have a good chance of negotiating the price down or getting some concessions from the seller, which could make up for getting a 7% mortgage rate instead of 6%."

Mortgage rates are still hovering above 7% and home prices remain high. Mortgage-purchase applications have dropped for four consecutive weeks, and pending sales dipped 8%, the steepest drop in five months.

The median sale price in February hit $365,888 in the four weeks up to February 25 — 5.4% higher than a year ago, and the largest increase since October 2022 except for the four weeks up to February 11.