US existing home sales bounce back after two months of declines

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Washington (AFP)

Sales of existing homes bounced back in February after two months of declines, boosted by big gains in the South and West, according to US industry figures released Wednesday.

The National Association of Realtors said the gains came despite low inventory of homes for sale and rising prices, factors that have plagued the very tight housing market for many months.

Total sales of existing homes, which includes single-family houses, townhouses, condos and co-ops, jumped three percent from January to an annual rate of 5.54 million, seasonally adjusted, NAR said. That was well above analyst expectations.

But sales by region were uneven, with the Northeast and Midwest seeing declines due to "unseasonably cold weather."

"A big jump in existing sales in the South and West last month helped the housing market recover from a two-month sales slump," NAR chief economist Lawrence Yun said in a statement.

"The very healthy US economy and labor market are creating a sizeable interest in buying a home in early 2018."

However, home prices -- especially in the West -- shot up considerably, he said. "Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar."

The median home price jumped 5.9 percent from a year earlier to $241,700 -- the 72nd consecutive increase.

Meanwhile, the inventory of homes on the market rose 4.6 percent from January to 1.59 million, but that was still 8.1 percent below year-ago levels. The year-over-year measure has fallen for 33 months, NAR said.

In addition to the rising prices, the average interest rate for 30-year mortgages rose for the fifth straight month and is expected to continue to move up as the Federal Reserve moves to ward off inflation, with another hike in the benchmark lending rate expected later Wednesday.