U.S. Home Sales Up 3.9%

March 23, 2007
Lower prices leads to higher sales.

As the struggling real estate market showed some signs of a rebound, U.S. home sales rose 3.9% in February, industry data showed March 23. The National Association of Realtors (NAR) said existing home sales improved to an annualized pace of 6.69 million, well ahead of market expectations of a pace of 6.30 million.

The monthly report showed signs that lower prices -- following a long boom in the property market that ended last year -- are starting to stimulate sales. The median sales price fell 1.3% to $212,800, the seventh decline in a row.

The property market has been struggling as lending rates have increased and speculators have pulled out of what had been a sizzling sector.

The latest data show existing home sales are still 3.6% below the 6.94 million-unit pace in February 2006, but last month's increase was the second in a row and the biggest monthly rise in three years.

Mortgage rates have returned to near historic lows after rising much of last year. The NAR said data showed a 30-year, conventional, fixed-rate mortgage was 6.16% in the last week, down from an average of 6.29% in February. That compared with 6.22% in January, and 6.25% in February 2006.

Total housing inventory levels rose 5.9% at the end of February to 3.75 million existing homes available for sale, which represents a 6.7-month supply at the current sales pace.

Copyright Agence France-Presse, 2007

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