Sales of existing homes unexpectedly rose in February by the largest amount in nearly three years, but analysts expressed fears that the recovery for the battered housing industry will be slowed by spreading troubles in mortgage lending.
The National Association of Realtors reported today that sales of existing homes rose by 3.9 per cent last month, pushed higher by a sharp increase in sales activity in the Northeast. It was the biggest increase since a similar increase in March 2004.
The increase pushed sales up to a seasonally adjusted annual rate of 6.69 million units, still 3.6 per cent lower than a year ago. Sales fell by 8.5 per cent for all of last year as housing hit a sharp slowdown after setting sales records for five straight years.
Analysts, who had been looking for sales to decline in February, said the increase reflected warmer weather in the Northeast and Midwest and said that the housing industry is still not on a sustained rebound.
The price of a median home sold last month dropped to $212,800, down by 1.3 per cent from the same month in 2006. It marked a record seven straight months that the median home prime has fallen compared to the same period a year ago.
Analysts said the price declines were helping to lure buyers back into the market. But analysts expressed concerns about what the growing problems in the subprime lending market will do to the prospects for future sales.
Agencies