USA Today
WASHINGTON (AP) — A real estate group says sales of existing homes rose from January to February in an unexpected boost for the slumping U.S housing market as buyers took advantage of deep discounts on foreclosures.
The National Association of Realtors said Monday that sales of existing homes grew 5.1% to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003.
Sales had been expected to fall to an annual pace of 4.45 million units, according to analysts surveyed by Thomson Reuters.
The median sale price was $165,400, down 15.5% from $195,800 a year earlier. But February’s median price was up from January’s median of $164,800.
Prices are down about 28% from their peak in July 2006.
“Our analysis shows that distressed homes typically are selling for 20% less than normal market price, and this naturally is drawing down the median price,” said Lawrence Yun, NAR chief economist.
“Lower prices coupled with very low interest rates and an $8,000 tax credit are causing first-time home buyers to dive in,” said Bill Emerson, chief executive officer of Quicken Loans in Livonia, Mich.
“While it’s good to see sales go up, it’s more important to see inventories go down. When that happens, only then can you start to talk about a housing correction,”
The inventory of existing homes for sale rose 5.2% to 3.80 million from 3.61 million in January. That represented a 9.7 month supply at the current sales pace, unchanged from January.
The housing market is at the core of the economic and financial meltdown that has triggered a collapse in asset prices, severely damaging household wealth. Stability in the housing market is seen as a key ingredient for the economy’s recovery from a recession that started in December 2007.
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