Unexpected Rise in Existiing Home Sales

The National Association of Realtors said on Monday that existing homes sales grew 5.1% to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003.

This rise in the existing home sales in sales follows a 5% decline in January.

Guy Cecala, publisher of Inside Mortgage Finance said:

“The areas that fall the fastest are going to recover. There’s going to be a floor established. Seven hundred thousand dollar houses are $250,000 — that’s what’s bringing people back into the markets.”

Lawrence Yun, chief economist for the National Association of Realtors, said first-time buyers accounted for half of all home sales last month:

“Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February. Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.”

The median sales price was $165,400, up slightly from January, but down 15.5% from $195,800 a year earlier.