Existing home sales edge higher, inventory at 13-year low

WASHINGTON Thu Feb 21, 2013 10:14am EST

A vacant and blighted house sits next to a well-kept occupied house in a once thriving eastside neighborhood in Detroit, Michigan January 23, 2013. REUTERS/Rebecca Cook

A vacant and blighted house sits next to a well-kept occupied house in a once thriving eastside neighborhood in Detroit, Michigan January 23, 2013.

Credit: Reuters/Rebecca Cook

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WASHINGTON (Reuters) - U.S. home resales edged higher in January and left the supply of homes at its lowest level in 13 years, a sign that steam is gathering in the U.S. housing market.

The National Association of Realtors said on Thursday that existing home sales rose 0.4 percent last month to a seasonally adjusted annual rate of 4.92 million units.

That was the second highest rate of sales since November 2009, when a federal tax credit for home buyers was due to expire.

Analysts polled by Reuters had forecast a 4.9 million-unit rate.

The U.S. housing market tanked on the eve of the 2007-09 recession and has yet to fully recover, but steady job creation helped the housing sector last year, when it added to economic growth for the first time since 2005.

The nation's inventory of existing homes for sale, which is not seasonally adjusted, fell 4.9 percent from December to 1.74 million, the lowest level since December 1999.

Many Americans are holding back from putting their homes on the market because they owe more on their mortgages than their homes are worth. A sharp drop in inventories over the last year has given developers more incentive to build homes. Home building is expected to boost the economy more in 2013 than it did last year.

Inventories were down 25.3 percent from January 2012.

At the current pace of sales, inventories would be exhausted in 4.2 months, the lowest rate since April 2005.

The low inventories are also helping pushing prices higher.

Nationwide, the median price for a home resale was $173,600 in January, up 12.3 percent from a year earlier.

(Reporting by Jason Lange)

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Comments (4)
At the 13 year low, will the banks now begin releasing more of the over abundance of foreclosures they are still holding? It makes a lot of sense for them. As a result, don’t be thinking that the market is suddenly going to begin rising. It’s not going to.

Feb 21, 2013 10:28am EST  --  Report as abuse
Yashmak wrote:
With construction on new homes starting up again, those folks waiting for the values of their homes to rise in order to match what they still owe are in for a long wait. . .especially if there’s still a massive inventory of bank held foreclosures waiting to be released.

I know that in the last few months of 2012, foreclosure inventories dropped by about 16%, so I don’t know how much of that is left.

Feb 21, 2013 12:22pm EST  --  Report as abuse
Captain47 wrote:
Read: “Many American BANKS are holding back from putting their homes on the market because they are trying to get more for their properties than they are worth. A sharp drop in inventories over the last year has falsely bolstered real-estate prices as far up as possible thereby preventing them from falling down to where they actually should be in reality; in their effort to continue to support the current administration in their rebuilding this house-of-cards known as the American economy. This will give stupid greedy developers more incentive to build homes, believing that ignorant americans will pay pumped-up prices for new homes, making the current administration look good for a few years before NOTHING really happens to bring things up dramatically, (unless of course the banks restart peddling loans at ridiculously low interest rates to people of much lesser means.”

Feb 21, 2013 12:45pm EST  --  Report as abuse
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