This article is by Derek Kravitz at MercuryNews.com
WASHINGTON — Sales of previously occupied homes rose in January to the highest pace in nearly two years, a hopeful sign ahead of the spring buying season.
The National Association of Realtors said Wednesday that existing-home sales increased 4.3 percent last month to a seasonally adjusted annual rate of 4.57 million. That’s the highest level since May 2010.
Home sales have risen nearly 13 percent over the past six months. While they are still well below the 6 million that economists equate with a healthy market, the gains have coincided with other changes in the market that suggest slow but steady improvement.
“The trend is clearly upward,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Single-family home sales rose 3.8 percent in January, also a positive sign. And the number of first-time buyers, who are critical to a housing recovery, increased slightly to make up 33 percent of all sales. That’s still below 40 percent, which tends to signal a healthy market.
One concern is the market continued to be saturated with homes at risk of foreclosure, which lower broader home prices. Those increased to make up 35 percent of sales.
Prices continued to fall. But economists note that the pace of the decline is slowing. The median sales price dropped in January to $154,700. That’s down only 2 percent from the same month last year.
And the supply of homes on the market has plunged to 2.3 million, the lowest level in almost six years. At last month’s sales pace, it would take more than six months to clear those homes, consistent with a healthy housing market. Fewer homes on the market could help boost prices over time.
Most economists said the January report was encouraging, especially when viewed with other recent positive housing data.
Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might be open to buying this year — and they responded in January to that interest by requesting more permits to construct single-family homes.
“The rise in existing-home sales in recent months adds to the indication from housing starts, building permits, and homebuilder sentiment that the sector has improved modestly since the middle of 2011,” said John Ryding, an economist at RDQ economics.
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