Tuesday, February 27, 2007

Existing-home sales rise 3% in January

By Rex Nutting, MarketWatch
Last Update: 10:13 AM ET Feb 27, 2007

WASHINGTON (MarketWatch) -- Sales of existing U.S. homes rose 3% to a seasonally adjusted annual rate of 6.46 million in January, the highest in seven months, the National Association of Realtors reported Tuesday.

It was the largest percentage gain in two years. Sales were down 4.3% year-on-year. Economists surveyed by MarketWatch were expecting sales to rise to about 6.30 million. See Economic Calendar.

Resales of single-family homes rose 3.5% to 5.69 million annualized, while condo resales fell 0.1% to 767,000 annualized.

The results were "surprisingly strong," said David Lereah, chief economist for the real estate trade group. Lereah said he couldn't be confident that the bottom had been reached, because unusually warm weather earlier helped to boost sales in January.

Inventories of unsold homes on the market rose 2.9% to 3.55 million, a 6.6-month supply.

The median sales price fell 3.1% year-over-year to $210,600. "The price correction is working," Lereah said. Prices fell the most in the West, which had been the hottest region for price appreciation. Median prices are down 4.6% in the West, which could reflect slower sales in relatively high-priced California and faster sales in cheaper areas such as Utah, Idaho and New Mexico.

In a separate report, Standard & Poor's said national home prices rose 0.4% year-on-year, according to the Case-Shiller index, which compares sales of the same homes over time. See full story.

Revisions to historic data show the pace of sales in December was slightly higher than previously reported at 6.27 million vs. 6.22 million. The supply of homes on the market was revised down to 3.45 million from 3.51 million.

Regionally, sales rose 5.6% in the West, 4.8% in the Midwest, 2% in the South and were unchanged in the Northeast.

In other reports, the Commerce Department said orders for durable goods plunged 7.8% in January. See full story.

The consumer confidence index rose to a five-year high of 112.5 in February from 110.3 in January, the Conference Board reported. See full story.

Rex Nutting is Washington bureau chief of MarketWatch.

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