Home sales show underlying strength, prices rise

Wed Mar 21, 2012 1:21pm EDT
 
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By Lucia Mutikani

WASHINGTON (Reuters) - U.S. home sales fell in February, but upward revisions to the prior month's pace and the first yearly increase in prices in 15 months suggested the housing market recovery remained on track.

The National Association of Realtors said on Wednesday existing home sales slipped 0.9 percent to an annual rate of 4.59 million units last month.

Still, last month's sales pace was the second highest since May 2010, helping to blunt the sting from the report.

Some economists said smoothing out the data to account for the extra day in February could have contributed to the surprise drop in sales last month. Economists polled by Reuters had expected sales to rise to a 4.62 million pace.

"We compared the February 2012 seasonal adjustment factor to past leap years and it appears that the seasonal adjustment was fairly aggressive," said Ellen Zentner, an economist at Nomura Securities in New York.

"Using last year's seasonal adjustment factor instead of this leap year's, existing home sales would have actually risen by 3.0 percent month on month to 4.77 million units."

Stocks on Wall Street edged lower on the data. Prices for U.S. Treasury debt rose on bargain hunting and the dollar edged up against a basket of currencies.

The report still added to signs of a tentative recovery in the housing market, with the median home price rising 0.3 percent from a year ago to $156,600 - the first yearly increase since November 2010.   Continued...

 
A house sits for sale in North Aurora, Illinois July 24, 2008. U.S. existing home sales fell more sharply than forecast in June and dragged the annual sales pace to a 10-year low, the National Association of Realtors said on Thursday. Home resales fell 2.6 percent from May to a 4.86 million-unit annual rate. REUTERS/Jeff Haynes