USA Today
WASHINGTON (AP) — Sales of existing homes unexpectedly rose last month as a warmer than usual winter boosted demand in many parts of the country, but a slack demand in some areas produced what one analyst called a “tale of two cities.”
The National Association of Realtors reported Thursday that sales of existing single-family homes and condominiums rose 5.2% in February to a seasonally adjusted annual rate of 6.91 million units. Analysts said the weather-related boost is likely to be short-lived with sales expected to slow again in coming months as rising mortgage rates further cool the housing market which has posted record sales levels for five straight years.
“Weather conditions across much of the country were unseasonably mild in January and likely were a factor in higher levels of buyer activity, which boosted sales that closed in February,” said David Lereah, chief economist for the Realtors.
The Realtors have been forecasting that sales of previously owned homes would fall about 5% this year compared with last year’s record pace. But Lereah said he may have to revise that forecast given the unexpected strength in February.
The price of homes sold in February was $209,000 for the nationwide median, the point where half the homes sold for more and half for less. It was down $1,000 from January and down from August’s $220,000, its recent peak. But it was 10.6% above the median price in February 2006. Analysts are forecasting those double-digit price gains will also moderate this year as demand slackens.
The increase in total sales — the biggest in two years — was driven by a 4.7% gain in the pace of single-family sales and an 8.8% jump in condo sales in February, the Realtors data showed.
Inventories also climbed 5.2%, leaving 3.03 million existing homes available for sale at the end of the month. That equates to 5.3 months’ supply at the current sales pace.
Economists believe that both new- and existing home sales will dip about 5% this year as rising mortgage rates cuts into demand. The concern is whether the decline could be more sizable than that. Some analysts are worried about that the speculative fervor in housing over recent years could come crashing down similar to the bursting of the stock market bubble in the early part of this decade.
But Lereah said all indications so far were pointing to a gradual slowdown in sales to a more sustainable pace.
By region of the country, sales rose 19.2% in the Northeast and were up 11.1% in the Midwest and 5.1% in the West in February. Only the South showed weakness last month with sales there dropping 2.5% from the January pace.
Lereah said sales activity at present was really a “tale of two cities” with some of the hottest markets showing declines while some medium priced markets still posting strong sales gains.
He said that sales were down by double-digit levels in such hot sales markets as Phoenix, Fort Lauderdale and San Diego. He said, by contrast, sales were up by double-digit amounts in areas such as Indianapolis, Albuquerque and Houston.
Home sales
|
Sales of existing homes |
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|
Year |
|
U.S. |
Northeast |
Midwest |
South |
West |
|
2003 |
|
6,175,000 |
1,019,000 |
1,468,000 |
2,283,000 |
1,405,000 |
|
2004 |
|
6,779,000 |
1,113,000 |
1,550,000 |
2,542,000 |
1,574,000 |
|
2005 |
|
7,075,000 |
1,170,000 |
1,587,000 |
2,703,000 |
1,615,000 |
|
Seasonally Adjusted Annual Rate |
||||||
|
2005 |
Feb |
6,930,000 |
1,150,000 |
1,570,000 |
2,610,000 |
1,610,000 |
|
|
Mar |
6,970,000 |
1,160,000 |
1,570,000 |
2,630,000 |
1,630,000 |
|
|
Apr |
7,170,000 |
1,210,000 |
1,620,000 |
2,710,000 |
1,620,000 |
|
|
May |
7,140,000 |
1,190,000 |
1,600,000 |
2,720,000 |
1,630,000 |
|
|
Jun |
7,270,000 |
1,230,000 |
1,620,000 |
2,720,000 |
1,700,000 |
|
|
Jul |
7,130,000 |
1,200,000 |
1,590,000 |
2,720,000 |
1,610,000 |
|
|
Aug |
7,210,000 |
1,210,000 |
1,620,000 |
2,710,000 |
1,670,000 |
|
|
Sept |
7,200,000 |
1,190,000 |
1,610,000 |
2,770,000 |
1,640,000 |
|
|
Oct |
7,050,000 |
1,120,000 |
1,570,000 |
2,730,000 |
1,640,000 |
|
|
Nov |
7,030,000 |
1,110,000 |
1,570,000 |
2,750,000 |
1,600,000 |
|
|
Dec |
6,750,000 |
1,100,000 |
1,560,000 |
2,680,000 |
1,420,000 |
|
2006 |
Jan r |
6,570,000 |
990,000 |
1,440,000 |
2,760,000 |
1,370,000 |
|
|
Feb p |
6,910,000 |
1,180,000 |
1,600,000 |
2,690,000 |
1,440,000 |
|
vs. last month: |
5.2% |
19.2% |
11.1% |
-2.5% |
5.1% |
|
|
vs. last year: |
-0.3% |
2.6% |
1.9% |
3.1% |
-10.6% |
|
|
|
|
|
|
|
|
|
|
Median home price |
||||||
|
Year |
|
U.S. |
Northeast |
Midwest |
South |
West |
|
2003 |
|
$169,500 |
$188,500 |
$143,400 |
$154,800 |
$231,500 |
|
2004 |
|
185,200 |
219,800 |
152,300 |
168,500 |
263,300 |
|
2005 |
|
208,300 |
245,700 |
168,200 |
179,600 |
308,300 |
|
Not Seasonally Adjusted |
||||||
|
2005 |
Feb |
189,000 |
250,000 |
154,000 |
163,000 |
273,000 |
|
|
Mar |
193,000 |
241,000 |
156,000 |
165,000 |
292,000 |
|
|
Apr |
205,000 |
243,000 |
166,000 |
174,000 |
307,000 |
|
|
May |
206,000 |
245,000 |
168,000 |
179,000 |
302,000 |
|
|
Jun |
217,000 |
249,000 |
174,000 |
190,000 |
318,000 |
|
|
Jul |
216,000 |
251,000 |
176,000 |
187,000 |
324,000 |
|
|
Aug |
220,000 |
253,000 |
176,000 |
189,000 |
327,000 |
|
|
Sept |
213,000 |
245,000 |
171,000 |
183,000 |
314,000 |
|
|
Oct |
218,000 |
252,000 |
170,000 |
195,000 |
315,000 |
|
|
Nov |
215,000 |
251,000 |
169,000 |
183,000 |
332,000 |
|
|
Dec |
211,000 |
241,000 |
170,000 |
182,000 |
319,000 |
|
2006 |
Jan r |
210,000 |
252,000 |
166,000 |
178,000 |
312,000 |
|
|
Feb p |
209,000 |
263,000 |
160,000 |
182,000 |
306,000 |
|
vs. last year: |
10.6% |
5.2% |
3.9% |
11.7% |
12.1% |
|
|
r-Revised p-Preliminary |
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