Source: Reuters —
WASHINGTON, March 21 (Reuters) – U.S. existing home sales rebounded more than expected in February as lower mortgage rates and the first year-on-year decrease in prices in 11 years pulled buyers back into the market, further evidence that the housing market was stabilizing at low levels.
The jump in sales of previously owned homes, which was reported by the National Association of Realtors on Tuesday, was the largest in more than 2-1/2 years and ended 12 straight monthly declines in sales, the longest such stretch since 1999.
The housing market has been the biggest casualty of the aggressive interest rate hikes delivered by the Federal Reserve in its battle to tame high inflation. The surge in sales added to data on housing starts and homebuilder confidence in suggesting that the housing market was probably finding a floor.
“It’s too early to declare the home sales recession over, but the decline in mortgage rates allowed buyers to dip their toes back in the market as did the cheaper prices,” said Christopher Rupkey, chief economist at FWDBONDS in New York.
Existing home sales, which are counted at the close of a contract, surged 14.5% to a seasonally adjusted annual rate of 4.58 million units last month. February’s sales likely reflected contracts signed a couple of months back. Mortgage rates decreased from mid-November through early February before rising again. Home sales could fall in March.
Last month, sales increased in all four regions, with the Midwest, West and the densely populated South posting double-digit growth. The bulk of sales were concentrated in the $250,000-$500,000 price bracket.
Economists polled by Reuters had forecast home sales would rebound 5.0% to a rate of 4.20 million units. Home resales, which account for a big chunk of U.S. housing sales, fell 22.6% on a year-on-year basis in February.