Posted on 23 Mar 2009
The National Association of Realtors (NAR) reported that sales of previously owned U.S. homes rose at their fastest pace in nearly six years in February, providing some good news for the recession hit-economy.
Sales rose 5.1 percent in February to a 4.72 million-unit annual rate, notching their largest gain since July 2003, according to the NAR, but about 45 percent of the sales were foreclosure or short-sale transactions.
"Our analysis shows that distressed homes typically are selling for 20 percent less than normal market price, and this naturally is drawing down the median price," said Lawrence Yun, NAR chief economist.
The median national home price declined 15.5 percent from a year ago to $165,400, the second biggest decline on record.
"Lower prices coupled with very low interest rates and an $8,000 tax credit are causing first-time home buyers to dive in," said Bill Emerson, chief executive officer of Quicken Loans in Livonia, Michigan. "While it's good to see sales go up, it's more important to see inventories go down. When that happens, only then can you start to talk about a housing correction."
The inventory of existing homes for sale rose 5.2 percent to 3.80 million from the 3.61 million overstock reported in January. That represented a 9.7 month supply at the current sales pace, unchanged from January.