Existing Homes Sales Rise to Three-Year High, but Miss Estimates

Andrew Klips  |

The National Association of Realtors said Thursday that sales and prices of existing homes rose in February, with the rate of sales rising to three-year highs, adding further signs that momentum continues to build in the nation’s housing market.

NAR reported a 0.8 percent increase in sales of pre-owned homes, which include closed transactions on single-family homes, townhouses, condominiums and co-ops, to a seasonally adjusted 4.98 million annual rate in February, following an upwardly revised 4.94 million annual pace in January. The January figure was originally estimated at 4.92 million last month. The February rate was the highest annual pace since November 2009

Foreclosures and short sales accounted for 25 percent of the February sales.

Although up for the month, the pace was still shy of the 5.01 million annual rate predicted by economists.

The national median price of existing homes was $173,600 in February, up 11.6 percent compared to the year prior month.

February’s sales pace in 10.2 percent above the rate in February 2012. The latest month represents the 20th straight month that sales have outpaced the year prior month and the 12th consecutive month the prices have increased. NAR noted in a statement that the last time a 12-month run happened with increasing prices was June 2005 to May 2006.

Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise,” said Lawrence Yun, NAR chief economist. Yun added that historically low mortgage rates are keeping home purchases affordable.

After plunging to the lowest level in 14 years with only 1.74 million units, the inventory of homes for sale swelled some in February, rising 9.6 percent to 1.94 million units. At the current pace, that is a 4.7-month supply, up from a 4.3-month supply in January, which was the lowest ratio since May 2005. The inventory is still 19.2 percent lower than February 2012.

The number of single-family homes sold in February was 0.2 percent lower compared to January with a seasonally adjusted rate of 4.36 million. Sales of condos and co-ops increased 8.8 percent from January to a 620,000 annual rate.

From a regional perspective, sales in the South and West both increased 2.6 percent in February compared to January. Sales in the Northeast were 3.1 percent lower month-over month and sales in the Midwest faded by 1.7 percent in February compared to the month prior.

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