Existing home sales in the U.S. showed a notable increase in the month of January, according to a report released by the National Association of Realtors on Wednesday, although the report also showed a significant downward revision to the data for December.
The report showed that existing home sales rose 4.3 percent to an annual rate of 4.57 million in January from a downwardly revised 4.38 million unit rate in December.
While the monthly increase far exceeded the 1.1 percent growth anticipated by economists, the number for December was well below the 4.61 million unit rate that had originally been reported.
Nonetheless, existing home sales in January are up 0.7 percent from 4.54 million in same month a year ago and are at their highest level since May of 2010.
Lawrence Yun, NAR chief economist, said, "The uptrend in home sales is in line with all of the underlying fundamentals - pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents."
The report also showed that existing homes available for sale at the end of January totaled 2.31 million, down 0.4 percent from 2.32 million in December.
The number of homes available for sale represents 6.1 months of supply at the current sales pace, down from 6.4 months of supply in December.
"The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers," Yun said.
"Foreclosure sales are moving swiftly with ready home buyers and investors competing in nearly all markets," he added. "A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time."
NAR also said that the national median existing-home price came in at $154,700 in January, down 4.6 percent from $162,200 in December and down 2.0 percent from $157,900 in January of 2011.
The report also showed that single-family home sales rose 3.8 percent to an annual rate of 4.05 million, while existing condominium and co-op sales increased 8.3 percent to an annual rate of 520,000.
Teunis Brosens, Senior Economist at ING Bank, said, "While sales seem to have bottomed, they recover only slowly."
"Prices are still falling and have yet to stabilize," he added. "But they should bottom out too over the coming months if sales continue to improve."
Friday morning, the Commerce Department is scheduled to release a separate report on new home sales in the month of January. Economists expect new home sales to edge up to an annual rate of 315,000 in January from 307,000 in December.
by RTT Staff Writer
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