Existing-Home Sales Rose
By 5.2% in Latest Month
A Wall Street Journal Online News Roundup
March 23, 2006
Sales of existing homes rebounded during February, in a surprise to economists after months of soft data had suggested that the housing sector was beginning to cool.
The National Association of Realtors said Thursday that sales of existing single-family homes and condominiums increased 5.2% to a seasonally adjusted annual rate of 6.91 million units. Singe-family home sales rose 4.7%, while sales of condominiums and co-ops jumped 8.8%. The increase halted a five-month string of declines in home resales.
Stephen Stanley, chief economist at RBS Greenwich Capital, called the data "a very surprising result" in light of the previous declines and a growing consensus that "the housing sector is softening rapidly."
Increased mortgage rates didn't appear to deter buyers. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.25% in February, up from 6.15% in January; the rate was 5.63% in February 2005.
David Lereah, chief economist for the Realtors, said that "higher interest rates had been tapping the breaks, notably in higher-cost housing markets, but we're seeing signs of stabilization in the market now with the sales rebound." The Realtors have been forecasting home resales would fall by about 5% this year compared to last year's record pace, but Mr. Lereah said he may have to revise that forecast given the unexpected strength in February.
The national median existing-home price was $209,000 in February, up 10.6 % from $189,000 a year ago. The median is the price at which half of the homes on the market sold for more and half sold for less.
The stock of existing homes for sale was level, at a 5.3 months supply at the current sales pace. Regionally, sales rose 19.2% in the Northeast, 11.1% in the Midwest, and 5.1% in the West. In the South, sales declined 2.5%.
The Commerce Department will issue a report on monthly new-home sales for February on Friday.
Separately, initial jobless claims fell by 11,000 to a seasonally adjusted 302,000 in the week ending March 18, the Labor Department said Thursday. The four-week moving average of initial jobless claims increased last week by 6,000 to 303,500. That's the highest level since Jan. 7, 2006 and well above the 2006 low of 276,750 reached on Feb. 4.
Email your comments to rjeditor@dowjones.com.
