Sales of Existing Homes Up 3.8%; First Rise in 3 Months

Sales of existing homes, after declining for three straight months, posted a modest increase of 3.8% in February, a real estate trade group reported Friday.

The National Assn. of Realtors said existing single-family homes were sold at a seasonally adjusted annual rate of 3.29 million units in February. Although this was 11.3% below the sales level of a year ago, it was the first advance since a 1.2% rise in October.

Sales fell 2.9% in November, 1.2% in December and 4.8% in January as the housing market was rocked by volatile mortgage rates and consumer worries sparked by the October stock market collapse.

The February increase in sales was credited to better economic news, falling interest rates and renewed consumer confidence. Fixed-rate mortgages, which stood at 10.61% at the beginning of the year, have fallen into single digits, standing at 9.92% currently.

Prices Increase Slightly

“Lower interest rates have brought the consumer back into the market,” said John Tuccillo, chief economist for the association. “February’s existing home sales numbers indicate good health on the part of the housing sector, which, in the sixth year of expansion, is far from dead.”

Tuccillo predicted that the lower mortgage rates would help boost sales even further in the months ahead.

The rise in home sales was accompanied by a slight increase in home prices. The median or mid-point price of a home increased to $88,300, up from $87,400 in January.

The increase in sales was led by a 12.8% jump in sales in the South, which rose to an annual rate of 1.23 million units, still 4.7% below the level of activity a year ago. This region has been hard hit by depressed conditions in the oil industry.