Sales of previously owned US homes rose unexpectedly in January, but prices tumbled to the lowest in nearly nine years, an industry group said today.
The National Association of Realtors said sales climbed 2.7% month over month to an annual rate of 5.36 million units from a downwardly revised 5.22 million pace.
Economists had expected January sales to fall 2.1% to a 5.24 million-unit pace from the previously reported 5.28 million units in December. Compared with January last year, sales were up 5.3%.
The average US home price fell 3.7% from a year ago to $158,800, the lowest since April 2002.
The NAR also revised the sales rates for the past three years, which showed 2010 sales little changed. An overhang of repossessed properties is casting a shadow over the housing market, weighing down the sector even as the broader economy has entered a sustainable growth path.
Housing was at the core of the worst recession since the 1930s. Last month, distressed sales accounted for 37% of transactions, the highest in 12 months.
First-time buyers accounted for just under a third of transactions in January, with all cash purchases making up 32%. Investors accounted for 23% of purchases in January.
The existing home sales report also showed the shift in housing becoming more pronounced, with sales of single family homes rising 2.4% and multi-family purchases surging 4.7%.
Demand for rental apartments is on the increase as prospective homeowners shy away from owning a property because of falling values and families lose their homes to repossession, boosting sales of multi-family homes.
Meanwhile, Standard & Poor's/Case Shiller said yesterday that prices for single-family homes fell for a sixth month in a row in December and warned that house prices could fall another 25%.
Applications for home loans rebounded last week as buyers rushed to take advantage of a slide in mortgage rates in the wake of the growing unrest in the Middle East, but demand is unlikely to be strong enough to prevent prices from falling further.
