After reporting a substantial increase in U.S. existing home sales in the month of January, the National Association of Realtors released a report on Wednesday showing a modest pullback in existing home sales in the month of February.
NAR said existing home sales slipped 0.9 percent to a seasonally adjusted annual rate of 4.59 million in February from an upwardly revised 4.63 million in January. Economists had expected existing home sales to edge up to 4.61 million from the 4.57 million that had been reported for the previous month.
The modest drop in existing home sales in February came after sales surged up by an upwardly revised 5.7 percent in January. The revised figure for January represents the highest level since May of 2010.
Despite the monthly decrease, NAR noted that existing home sales in February are 8.8 percent higher than the 4.22 million unit rate in February of 2011.
Lawrence Yun, NAR chief economist, said, "The market is trending up unevenly, with record high consumer buying power and sustained job gains giving buyers the confidence they need to get into the market."
"Although relatively unusual, there will be rising demand for both rental space and homeownership this year," he added. "The great suppression in household formation during the past four years was unsustainable, and a pent-up demand could burst forth from the improving economy."
The report also showed that the national median existing home price came in at $156,600 in February, up 1.3 percent from the previous month and up 0.3 percent from the same month a year ago.
NAR noted that distressed homes accounted for 34 percent of February sales, down from 35 percent in January and 39 percent in February of 2011.
Housing inventories at the end of February totaled 2.43 million existing homes available for sale, up 4.3 percent from 2.33 million in January.
The number of homes available for sale represents 6.4 months of supply at the current sales pace compared to the 6.0 months of supply in January.
The report also showed that existing single-family home sales fell by 1.0 percent in February, while existing condominium and co-op sales were unchanged.
NAR also said that existing-home sales in the Northeast and the West fell by 3.3 percent and 3.2 percent, respectively.
On the other hand, existing home sales in the Midwest rose by 1.0 percent and sales in the South edged up by 0.6 percent.
Friday morning, the Commerce Department is scheduled to release a separate report on new home sales in the month of February. Economists expect new home sales to rise to an annual rate of 325,000 in February from 321,000 in January.
by RTT Staff Writer
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