Home sales post biggest jump in 2 years
Pace of existing sales picked up last month versus forecasts for a modest decline.
NEW YORK (CNNMoney.com) - Home sales posted their biggest jump in two years in February, a trade group said Thursday in a report that showed surprising strength in the housing market.
The National Association of Realtors reported existing homes sold at an annual rate of 6.91 million in February, up from a revised 6.57 million pace in January. The 5.2 percent rise was the biggest gain since a 5.9 percent jump in February 2004.
Economists surveyed by Briefing.com had forecast a drop to an annual pace of 6.5 million last month.
The surprise pickup in February sales may have been due partly to favorable circumstances in January, as the report is based on when a sale closes, not when a contract is signed.
The trade group's statement said the warmest January on record may have helped to spur sales, while a brief dip in mortgage rates that month also probably helped.
The average rate on a 30-year fixed-rate mortgage fell to 6.15 percent in January from 6.27 percent in December and 6.33 percent in November, according to mortgage finance firm Freddie Mac. Rates have risen above 6.25 percent since the January dip.
Meanwhile, home prices dipped in February from January but rose from a year earlier.
The median price edged down to $209,000 from $210,000 in January. Half of homes sold for more than the median and the rest for less.
The average price also slipped to $256,000 from $260,000. But both price readings were ahead of year-earlier levels, when the median price was $189,000 and the average was $249,000.
"Housing is simply returning to a normal market, where annual home prices will rise a little faster than the overall rate of inflation," said a statement from Thomas Stevens, a Vienna, Va., realtor and the president of the trade group.
Rising home values have helped drive consumer spending in recent years, as home owners have used refinancing and home equity loans to unlock pull cash from their homes.
But while there have been numerous reports showing the real estate market cooling from the record pace set in 2005, predictions of a bursting of a real estate bubble have so far proven premature, if not inaccurate.
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