Existing home sales touch three-year high

WASHINGTON Thu Mar 21, 2013 10:29am EDT

A ''for sale'' sign is seen outside a home in New York June 19, 2012. REUTERS/Shannon Stapleton

A ''for sale'' sign is seen outside a home in New York June 19, 2012.

Credit: Reuters/Shannon Stapleton

WASHINGTON (Reuters) - Home resales hit a three-year high in February and prices jumped, adding to signs of an acceleration in the housing market recovery, even though the supply of properties on the market increased.

The National Association of Realtors said on Thursday existing home sales increased 0.8 percent to an annual rate of 4.98 million units last month, the highest level since November 2009. The January sales pace was revised up a 4.94 million units from the previously reported 4.92 million units.

Economists polled by Reuters had expected home resales to rise to a 5 million-unit rate. Homes took about 74 days to sell in February, according to the median estimate, down from 97 days from a year ago.

The rise in sales last month was the latest indication that the housing market was gaining more ground. Data this week showed builders broke ground on more houses in February and permits for future construction approached a five-year high.

"With buying conditions remaining very supportive to demand and overall economic fundamentals continuing to improve, we expect the momentum in housing activity to improve further, providing a supportive backdrop for the recovery more generally," said Millan Mulraine, a senior economist at TD Securities in New York.

A very accommodative monetary policy by the Federal Reserve, which has held mortgage rates near record lows, is helping to lift the housing market off the floor and lending the economy much needed support.

The U.S. central bank on Wednesday acknowledged the firming housing market tone, but decided to continue to buy $85 billion in mortgage and Treasury bonds per month, citing the risks to the economy from tighter fiscal policy and renewed financial problems in Europe.

Last month, the inventory of unsold homes on the market increased 9.6 percent to 1.94 million. That represented a 4.7 months' supply at February's sales pace, up from 4.3 months in January, the first increase since April. Inventories typically rise in February.

Still, the months' supply remained below the 6.0 months that is normally considered as a healthy balance between supply and demand.

The U.S. housing market had been held back by an overhang of unsold homes. Since surging in August, home resales have only increased modestly, an indication that tight supplies in some parts of the country are constraining sales.

Economists believe these dwindling supplies of previously occupied homes for sale could push buyers into the new homes market where sales have been lagging.

The median home sales price in February rose 11.6 percent from a year ago to $173,6000.

Distressed properties, foreclosures and short sales, which typically occur at deep discounts, accounted for a quarter of overall sales last month, up from 23 percent in January.

Investors bought 22 percent of homes in February, with first-time buyers accounting for 30 percent of the transactions.

(Reporting By Lucia Mutikani; Editing by Neil Stempleman)

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Comments (4)
Crash866 wrote:
even though the supply of properties on the market increased.

Mar 21, 2013 10:17am EDT  --  Report as abuse
USAPragmatist wrote:
And I am proud to say I helped add to these numbers in February. With interest rates as low as they are and the economy poised for rebound, I am thinking this is a REAL good time to buy. Just make sure you get a fixed rate loan, with no ‘fancy’ things.

Mar 21, 2013 11:30am EDT  --  Report as abuse
GA_Chris wrote:
agreed with USAPrag…. I bought at the end of last year and feel i got a steal and locked in a 3.125% 30 year fixed…

However, the amount of deals out there is declining

Mar 21, 2013 12:47pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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