The housing recovery has been ongoing for some time now, and this was once again reflected in February, as consumers continued scooping up available properties even as prices rose over those seen in January.
Existing-home sales and prices continued their steady upward trends last month as the housing market continued to gain steam, according to the latest monthly data from the National Association of Realtors. This marked the 20th straight month in which there have been annual improvements in sales, while the 12th in which prices rose as well.
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“Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise,” said Lawrence Yun, chief economist for the NAR. “Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable. The only headwinds are limited housing inventory, which varies greatly around the country, and credit conditions that remain too restrictive.”
In all, the amount of sales climbed 10.2 percent on an annual basis in February to an adjusted annual rate of 4.98 million units, up from 4.52 million seen in the same month a year prior, the report said. That number was also a 0.9 percent increase over January’s total of 4.94 million, and marked sales climbing to the highest levels observed since November 2009, just before the expiration of the homebuyer tax credit.
Meanwhile, the median national home price spiked 11.6 percent on a year-over-year basis, climbing to $173,600, the report said. This also marked the first time in which there were 12 straight months of increases since the period from June 2005 to May 2006, and was the highest annual jump observed in any month since November 2005, when prices ticked up 12.9 percent.
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It seems probable that the housing recovery will continue at least through the end of the year as well, because interest rates are likely to remain well below 4 percent as long as the Federal Reserve Board continues to buy up bonds as part of its qualitative easing efforts. That, in turn, could encourage consumers to take advantage despite rising prices, which are still somewhat below those observed prior to the housing market bubble bursting. Those improvements could likewise encourage more sellers who were previously underwater on their mortgages to begin listing their properties for sale again.
Image: David Sacks