Sales of existing homes reached a three-year high in February and their prices rose, the National Association of Realtors said on Thursday, adding to signs of an acceleration in the housing recovery even though the supply of properties on the market increased.
The association said sales increased 0.8 percent to an annual rate of 4.98 million units last month, the highest level since November 2009. The January sales rate was revised up to 4.94 million units from the previously reported 4.92 million units.
Economists polled by Reuters had expected sales to rise to a five-million-unit rate. Homes took about 74 days to sell in February, according to the median estimate, down from 97 days a year ago.
In another report, the Labor Department said the number of Americans seeking unemployment aid barely changed last week, while the average over the last month fell to a five-year low. The decline in layoffs is helping to strengthen the job market.
Weekly unemployment benefit applications rose just 2,000 to a seasonally adjusted 336,000, the department said.
Over the last four weeks, the average number of applications has dropped by 7,500, to 339,750. That is the lowest level since February 2008, just three months into the recession.
In a third economic report, the Philadelphia Federal Reserve Bank said its business activity index rose to 2 from minus 12.5 in February, topping economists’ expectations for minus 2.
Any reading above zero indicates expansion in the region’s manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware. Before March’s gain, the index had contracted in three of the last four months.
New orders rose to 0.5 from minus 7.8, while inventories rose to zero from minus 10. The gauge of the number of employees gained to 2.7 from 0.9, but the average employee workweek dropped to minus 12.9 from minus 1.6.
The survey is seen as one of the first monthly indicators of the health of manufacturing in the nation. Survey respondents’ view on the coming months perked up slightly with the gauge of business conditions for the next six months rising to 32.5, from 32.1.
The rise in home sales last month was the latest indication that the housing market was gaining more ground. Data this week showed builders broke ground on more houses in February and permits for future construction approached a five-year high.
“With buying conditions remaining very supportive to demand and overall economic fundamentals continuing to improve, we expect the momentum in housing activity to improve further, providing a supportive backdrop for the recovery more generally,” said Millan Mulraine, a senior economist at TD Securities in New York.
The Federal Reserve’s monetary policy, holding mortgage rates near record lows, is helping to lift the housing market and bolster the economy.
Last month, the inventory of unsold homes on the market increased 9.6 percent to 1.94 million. That represented a 4.7 months’ supply at February’s sales rate, up from 4.3 months in January, the first increase since April. Inventories typically rise in February.
Still, the months’ supply remained below the six-month level that is normally considered a healthy balance of supply and demand.
Since surging in August, home resales have increased only modestly, an indication that tight supplies in some parts of the country are constraining sales.
The median home sales price in February rose 11.6 percent from a year ago, to $173,6000.
Posted by Reuters March 21st, 2013. Read original here.