The surprise rise in US home sales by 2.9 percent in February is putting an end to a six month of decline and is attributed to the largest ever year-over-year decline in home prices.
US existing home sales showed a surprise rebound in February, rising 2.9 percent after six straight months of declines, the National Association of Realtors reported Monday.
The association said part of the gains could be attributed to the largest ever year-over-year decline in home prices -- a drop in median prices of 8.2 percent.
Sales increased to an annual rate of 5.03 million units, well ahead of the pace of 4.86 million expected by private economists.
Despite the increase, the February sales pace is 23.8 percent below the pace set in February 2007, reflecting a horrific slump in the housing market after years of sizzling growth.
The group said falling home prices played a significant role in the rebound in home sales.
The median sales price fell 8.2 percent in the past year to 195,900 dollars, which is the largest year-over-year drop since the group began tracking this data. The last time the median price was lower was May 2004.
"The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers," NAR chief economist Lawrence Yun said.
Inventories of existing home sales, which includes both single family homes and condominiums, fell 3.0 percent in February to 4.03 million units.
At the February sales pace, it would take 9.6 months to exhaust the supply of homes on the market, down from the 10.2 months supply in January.
Date created : 2008-03-24