February existing home sales rise
* Sales rose 2.9% to a seasonally adjusted annual rate of 5.03 million from 4.89 million in January. That was better than economists' forecasts for a drop of 0.8% to 4.85 million. Regionally, sales rose 11.3% in the Northeast, 2.1% in the South, and 2.5% in the Midwest, while falling 1.1% in the West. The February sales rate was down 23.8% from 6.6 million in February 2007.
* For sale inventory came in at 4.034 million single-family homes, condos, and co-ops. That was down 3% from 4.16 million in January (previously reported as 4.191 million), but up 6% from 3.805 million in February 2007. On a "months supply at current sales pace" basis, inventory was 9.6 months. That was down from 10.2 months in January (previously reported as 10.3), but up from 6.9 months in February 2007.
However, there was a bit of bifurcation by property type. The condo/co-op months supply indicator rose to a cycle high of 13 from 11.8 -- indicating that growth in condo supply outpaced growth in sales. By contrast, the single-family-only inventory indicator dipped to 9.2 from 10.
* Median home prices fell 1.9% to $195,900 in February from $199,700 in January (previously reported as $201,100). On a year-over-year basis, prices were down 8.2% from $213,500 in February 2007, the sharpest drop recorded yet in this cycle.
Are lower prices finally drawing buyers out of the woodwork? Maybe. Existing home sales topped expectations last month, while the absolute level of inventory for sale declined. The likely contributing factor: Median home prices fell at the sharpest year-over-year rate in this cycle. At $195,900, "used" U.S. homes haven't been this cheap since May 2004.
It will be interesting to see if the housing market can maintain this momentum heading into the heart of the spring selling season. On the one hand, credit markets remain tight and the economy is still struggling. On the other hand, both the Federal Reserve and federal government are throwing everything at the mortgage market to re-liquefy it. Fasten your seat belts.