March 20, 2020 / 2:03 PM / 15 days ago

U.S. existing home sales surge to 13-year high in February

FILE PHOTO: Construction workers build a single family home in San Diego, California, U.S. February 15, 2017. REUTERS/Mike Blake

WASHINGTON (Reuters) - U.S. home sales surged to a 13-year high in February, but the housing market recovery is likely to be derailed by the coronavirus pandemic, which has unleashed a wave of layoffs and left the economy teetering on the brink of a recession.

The National Association of Realtors said on Friday existing home sales jumped 6.5% to a seasonally adjusted annual rate of 5.77 million units last month, the highest level since February 2007. The data reflected contracts signed in January and early February, before the highly contagious virus swept through the country, severely disrupting economic activity.

Economists polled by Reuters had forecast existing home sales would rise 0.7% to a rate of 5.50 million units in February.

Existing home sales, which make up about 90% of U.S. home sales, accelerated 7.2% on a year-on-year basis in February.

The report was released a day after data showed the number of Americans filing claims for unemployment benefits surged to a 2-1/2-year high last week amid layoffs in the entertainment, leisure and hospitality, and transportation industries.

Economists are expecting a recession by the second quarter, though some believe a downturn is already underway. The housing market has regained its footing as mortgage rates have declined after hitting a soft patch beginning in the first quarter of 2018 through the second quarter of 2019.

Home sales last month rose in the Midwest, the populous South and the West, which is the most expensive region. They, however, fell in the Northeast.

There were 1.47 million previously owned homes on the market in February, down 9.8% from a year ago. The median existing house price increased 8.0% from a year ago to $270,100 in February.

At February’s sales pace, it would take 3.1 months to exhaust the current inventory, down from 3.6 months a year ago. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.

Reporting by Lucia Mutikani; Editing by Paul Simao

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