An uptick in for-sale inventory was just the jolt the housing market needed to get moving again.

Sales of existing homes jumped 9.5% in February, to a seasonally-adjusted annual rate of 4.35 million, the fastest pace of sales since March 2023, the National Association of Realtors said Thursday. The second increase in as many months blindsided forecasters who had expected a slight downturn, according to a survey of economists by Dow Jones Newswires and the Wall Street Journal. There were 1.07 million homes for sale, the most for any February since 2020.

Despite the sudden surge, home sales remained 3.3% below their levels in February 2023, highlighting how much today’s high mortgage rates have discouraged homebuying and selling. Homes sold in February reflect contracts signed over the previous two months, when the average mortgage rate was falling from the two-decade high it reached in October according to Freddie Mac. 

The average rate offered for a 30-year mortgage fell from 7.22% at the end of November to 6.62% at the beginning of January, Freddie Mac data shows. This dip provided a much-needed boost to buying power. Home sales have slowed since early 2022 as rates for the standard 30-year loan have risen from the record low average of 2.65% in 2021.

High mortgage rates, a consequence of the Federal Reserve’s campaign of anti-inflation interest rate hikes have stifled home sales by putting housing costs out of reach for many buyers, and have also discouraged sellers, who are reluctant to give up ultra-low fixed rates they locked in back when borrowing costs were cheap.

That lock-in effect has meant that demand has outpaced supply, driving prices up. The median-priced home sold for $384,500 in February, the highest price ever for that month, up 5.7% over the year.

Record prices and high mortgage rates have made the market especially hostile to first-time buyers, who made up 26% of buyers in February, tied for the lowest percentage ever, according to a survey carried out by the NAR.

More people may be putting their houses on the market because they’ve delayed it over the past few years and can’t wait any longer, Lawrence Yun, chief economist at the association said. It’s also possible that people have given up on waiting for a substantial drop in mortgage rates.

“Maybe consumers are accepting the new normal,” he said in a conference call with reporters. 

Mortgage rates are expected to fall this year as the Federal Reserve reduces the fed funds rate in response to cooling inflation. However, the days of mortgage rates in the 3% range are unlikely to return, Yun said.