Tuesday, March 26, 2013

U.S. Home Sales Move Up Hit Highest Level Since 2009

The U.S. housing market continues to show signs of recovery, with February existing home sales rising 10.2 percent from a year earlier, according to data released today by the National Association of Realtors.

NAR reported 4.98 million transactions in February, the highest level since 2009, when a tax credit was available for purchases. The total compares to 4.94 million in January and 4.52 million in February, 2012.

The national median price rose to $173,600, an 11.6 percent increase from February 2012--the largest gain since November, 2005.

The latest data affirms "a healthy recovery" for the market, NAR reports. Sales have been above year-ago levels for 20 consecutive months, while prices show 12 consecutive months of year-over-year price increases.

"Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise," NAR chief economist Lawrence Yun said. "Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable." But there are "headwinds," including limited housing inventory and "credit conditions that remain too restrictive.

Sales of distressed homes accounted for 25 percent of February sales, up from 23 percent in January, but down from 34 percent in February 2012, NAR reports. Fifteen percent of February sales were foreclosures, and 10 percent were short sales. The foreclosure properties typically sold at an 18 percent discount from market value.

Although there have been reports of dwindling supply in many markets, the overall housing inventory at the end of February actually rose 9.6 percent to 1.94 million existing homes available for sale, representing a 4.7-month supply at the current sales pace, up from 4.3 months in January, the lowest supply since May 2005, Listed inventory is 19.2 percent below a year ago when there was a 6.4-month supply.

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