Existing home sales rose to their highest level in more than three years, while prices increased nationwide, yet another indication of a housing recovery that bodes well for the overall economy.
The National Assn. of Realtors said sales of existing single-family houses, townhomes, condos and co-ops rose 0.8% in February to a seasonally adjusted annual rate of 4.98 million from an upwardly revised 4.94 million in January.
That was 10.2% higher than February 2012 and the highest rate since November 2009 when a national homebuyer tax credit helped propel sales.
The nation’s median sales price hit $173,600, an 11.6% jump from the same period a year earlier. Rising prices are helping more and more homeowners escape their negative equity positions, meaning they no longer owe more on their mortgages than the value of their homes.
That is good for consumer spending.
"A strong rise in home values is contributing to housing wealth recovery, which has risen by $1.4 trillion in the past year and looks to top that increase this year," Lawrence Yun , the association’s chief economist, said in a statement. "The extra consumer spending arising from growth in housing wealth is expected to be $70 billion to $110 billion this year."
Yun said although an improving economy and pent-up demand are good news for the housing recovery, tight lending conditions and a lack of inventory remain “headwinds.”
The lack of available homes for sale has been a major factor in rising prices across the country.
The inventory crunch eased slightly last month as the nation prepares to enter the spring homebuying season.
At the end of February, there were 1.94 million existing homes for sale, which represents a 4.7 month supply if homes sold at the current rate, the realtor group said. That’s an improvement from January, when there was a supply of 4.3 months, the lowest since May 2005.
Still, conditions are tight. Listed inventory is down 19.2% from February 2012, when there was a 6.4-month supply.
Existing home sales in the West jumped 2.6% from January. Home sales also increased in the South, but fell in the Northeast and Midwest.