Existing home sales spiked to a 3-year high, carrying along an increase in home prices nationwide, the National Association of Realtors announced, yet another confirmation that housing is following the economy overall recovery.
Sales of existing single-family houses, townhomes, condos and co-ops rose 0.8% in February to a seasonally adjusted annual rate of 4.98 million from an upwardly revised 4.94 million in January, according to the National Assn. of Realtors.
The January number was 10.2% higher than February 2012 and the highest rate since November 2009 when a national homebuyer tax credit helped propel sales.
The nation’s average sales price hit $173,600, an 11.6% increase from the same period a year earlier. Rising prices are helping more and more homeowners escape their negative equity positions, meaning they no longer owe more on their mortgages than the value of their homes.
Which, needless to say, is good for consumer spending.
Lawrence Yun , the association’s chief economist, said it in a statement.
"A strong rise in home values is contributing to housing wealth recovery, which has risen by $1.4 trillion in the past year and looks to top that increase this year," he said.
"The extra consumer spending arising from growth in housing wealth is expected to be $70 billion to $110 billion this year."
In the same context, Yun explained that although an improving economy and pent-up demand are good news for the housing recovery, tight lending conditions and a lack of inventory remain “headwinds.”
The lack of available homes for sale has been a major factor in rising prices across the country.
The inventory crunch eased slightly last month as the nation prepares to enter the spring home buying season.
At the end of February, there were 1.94 million existing homes for sale, which represents a 4.7 month supply if homes sold at the current rate, the realtor group said. That’s an improvement from January, when there was a supply of 4.3 months, the lowest since May 2005.
