Sales of existing homes in U.S. increase to three-year high

Survey Results

The median price of an existing home increased to $173,600 last month, up 11.6% from February 2012, today’s report showed.

The number of previously owned homes on the market climbed to 1.94 million from 1.77 million in January. It was the first gain in supply since April.

At the current sales pace, it would take 4.7 months to sell those houses compared with 4.3 months at the end of January.

Month’s supply in this range will typically yield price increases in the “low single-digit” range, Lawrence Yun, NAR chief economist, said in a news conference as the figures were released.

The group today raised its forecast for the 2013 increase in median prices to 7% from a prior estimate of 4%.

Existing-home sales, tabulated when a contract closes, have recovered since reaching a 13-year low of 4.11 million in 2008. The market peaked at a record 7.08 million in 2005.

Market Breakdown

Resales accounted for about 93% of the residential market in 2012, and a total of 4.66 million previously owned houses were sold last year. That was the most since 2007 and up 9.4% from 2011.

The strength in demand has bolstered sales of new properties as well. Lennar Corp., the third largest U.S. homebuilder by revenue, said orders rose in the fiscal first quarter.

“Current market conditions are driven by strong demand resulting from low interest rates and attractive home prices, which have led to very affordable monthly payments, compared to increasing rental rates,” Chief Executive Officer Stuart Miller said in a statement yesterday. New orders, deliveries and backlog have “shown strong increases,” he said.

Housing starts climbed 0.8% last month to a 917,000 annualized pace, Commerce Department data showed this week. Permits for future construction rose 4.6% to a 946,000 rate, the most since June 2008.

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