US Home Sales Complete Best Winter Since 2007

U.S. previously occupied home sales for December, January and February were the highest level of winter sales in five years as an improving job market and mild weather has increased demand for homes. There were 4.59 million new homes sold in February, down 0.9% from January's revised number of 4.63 million, which was the highest month for sales since May 2010 according to data from the National Realtors Association. Sales were up 8.8% from February 2011. The increasing sales are still not at pre-recession levels, or the 6 million home sales level economists associate with a healthy market. The median price for an existing home rose 0.3% in the last year to $156,000 as fewer distressed, foreclosed or short sale, homes were sold at a discount. The median price for new homes is about 30% higher than existing homes, twice the normal markup. Distressed homes, foreclosures and short sales, were 34% of sales in February according to the NAR, down from 39% a year earlier. 20% of February's home sales were foreclosures, in a more stable market it would be less than 10% of total home sales. Total housing inventory rose to 2.43 million, a 6.4-month supply. There was a 6.0-month supply in January, the lowest in 7 years. The increase in supply may come as increasing prices give more sellers the confidence to enter the market. More buyers may be entering the market as more people find jobs. The unemployment rate at 8.3% is the lowest in three years. During the three months evaluated for winter home sales, the economy added an average of 245,000 jobs a month. Even as sales increase, key indicators lag behind. Sales to first-time home buyers are more than 40% in a healthy economy, according to economists. February new buyers accounted for 32% of home purchases. Potential home owners are wary of entering the market amid concerns that prices may fall further. Those who want to buy may not qualify or meet stricter down-payment requirements. Canceled contracts, as a result of declined mortgage applications, problems found by home inspectors or re-appraisals, occurred at least once with one third of realtors in the past five months, up from at least once among 18% of realtors in September. Home sales increased in the Midwest and South in February even as sales in the Northeast and West declined. Sales fell the most in the Northeast, down 3.3% from January. Home sales in the West were down 3.2% from January. Sales rose by 1.0% in the Midwest and 0.6% in the South. Sales in all the regions are about 5% to 13% higher than a year ago.