The housing market, which received some further good news on Tuesday with the report of gains in both housing starts and building permits in February, has now gotten some further welcome tidings within the past hour, as the National Association of Realtors has reported that sales of existing homes had ticked up slightly last month.
Specifically, the NAR, a real estate trade group, reported that existing home sales had increased in February from an upwardly revised 4.94 million annual-unit rate to 4.98 million units. Initially, the January estimate had been for sales of 4.92 million annually. Although this was a scant increase, it was one more indication that housing is still on the mend.
All of last month's increase, meanwhile, came in the market for co-ops and condominiums, as that sector posted a month-to-month increase, going from 0.57 million residences to 0.62 million. By comparison, single-family houses, which are a much larger market, eased from 4.37 million units to 4.36 million.
It should be noted, however, that both categories were up strongly from a year ago. For example, single-family sales rose from 4.01 million to the aforementioned 4.36 million houses, while co-ops and condos rose from 0.51 million units to 0.62 million apartments and houses, a gain of 21.6%. These year-to-year increases follow a pattern now in place throughout the industry, and underscore why we believe that housing, already a notable contributor to the aggregate economic recovery, will be even further out front in this year's presumptive economic expansion.
And it is not just the volume of homes that are up, but so too are housing prices. To wit, the median price of all homes in the resale category rose to $173,600 last month. That topped--by exactly $3,000--the $170,600 price tag in January of this year. In February of 2012, meanwhile, the median price of an existing home that had a recorded sale was $155,600.
The lone disquieting note was that inventories of unsold homes rose modestly last month from a 4.3-month supply in January to 4.7 months in February. Here, too, though, there was dramatic improvement from a year earlier when the median supply of unsold homes stood at 6.4 months. Historically, a healthy level of unsold housing inventory is about six months. So, even with the modest uptick last month, this market is clearly not saturated.
Taken as a whole, this was another positive report, notwithstanding the modest level of aggregate improvement, and suggests that housing will remain a formidable source of economic growth in 2013 and most likely 2014.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.