In what may be the first fluttering of a recovery in the housing market, sales of existing homes last month actually increased from January levels according to the National Association of Realtors (NAR.)
Sales of previously occupied single-family houses, condominiums, co-ops and town houses rose 2.9 percent in February to a seasonally adjusted annual sales rate of 5.03 million units. The January sales level was 4.89 million. In spite of the encouraging small increase, February's rate was still 23.8 percent below the 6.60 million pace one year earlier.
NAR's chief economist Lawrence Yun said the increase is encouraging. "We're not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing," he said. 'Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year."
Sales of single-family homes increased 2.8 percent to an annual rate of 4.47 units from an upwardly revised estimate of 4.35 million in January but are still 22.9 percent lower than the 5.80 million sales in February 2007. Condo and co-op sales did a little better, rising 3.7 percent to 560,000 units from January's level of 540,000.
Another bit of good news; inventories of existing dwellings fell 3.0 percent in February to 4.03 million homes available for sale. This is a 9.6 month supply at the current rate of sales compared with a 10.2 month supply in January.
Prices did continue to drop, with the median price of all housing types dropping to $195,900 in February 2008, a decrease of 8.2 percent from the median of $213,500 in February 2007. NAR said that the slowdown in sales from a year ago is greater in high-cost areas, so there is a downward pull to the national median with relatively fewer sales in higher priced markets.
The median price of single-family houses was down 8.7 percent year-over-year to $193,900 and the median existing condo price was $211,700, 4.9 percent lower than a year ago.
Readers of the survey were advised to look as well at home prices within metropolitan areas. Roughly half of the metro areas in the U.S. have had price increases with healthy gains in markets such as Oklahoma City and Trenton, New Jersey. "In other areas such as Sacramento, a rapid price decline has induced buyers to come into the market and sales are now rising," Yun said. "The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers."
In virtually every housing report we have seen over the last few months the situation in the Northeast seems to be improving faster than in other parts of the country. That is true of the current existing home sales report wherein sales in the Northeast were up 11.3 over January but are remain 26.4 percent below February 2007. The median price in the Northeast was $264,800, up 0.4 percent from a year ago.
Two of the other regions also showed increases. Existing-home sales in the Midwest rose 2.5 percent last month while lagging behind February 2007 sales by 19.5 percent. The median price in the Midwest was $143,900, which is 7.1 percent lower than February 2007.
In the South, sales increased 2.1 percent but are 22.0 percent below February 2007. The median price in the South was $163,400, down 8.6 percent from a year ago.
Sales in the West slipped 1.1 percent month-over-month and are 29.2 percent below a year ago. The median price in the West was $290,400, down 13.4 percent from February 2007.