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News : US Economy Last Updated: Mar 21, 2011 - 3:47 PM

US existing-home sales fell in February; Distressed/bank sales accounted for 39% of the total
By Finfacts Team
Mar 21, 2011 - 3:36 PM

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US existing-home sales fell in February following three straight monthly increases, according to the National Association of Realtors. Distressed/bank sales accounted for 39% of the total.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6% to a seasonally adjusted annual rate of 4.88m in February from an upwardly revised 5.40m in January, and are 2.8% below the 5.02m pace in February 2010.

Lawrence Yun NAR chief economist, expects an uneven recovery.  “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,” he said.  “This tug and pull is causing a gradual but uneven recovery.  Existing-home sales remain 26.4% above the cyclical low last July.”

A parallel NAR practitioner survey shows first-time buyers purchased 34% of homes in February, up from 29% in January; they were 42% in February 2010.

All-cash sales were a record 33% in February, up from 32% in January; they were 27% in February 2010.  Investors accounted for 19% of sales activity in February, down from 23% in January; they were 19% in February 2010.  The balance of sales were to repeat buyers. 

The national median existing-home price for all housing types was $156,100 in February, which is 5.2% below February 2010.  Distressed homes (foreclosure/bank forced sales) - -sold at discount – accounted for a 39% market share in February, up from 37% in January and 35% in February 2010.  “The decline in price corresponds to the record level of all-cash purchases where buyers – largely investors – are snapping up homes at bargain prices,” Yun explained.  “We’d be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal.”

Total housing inventory at the end of February rose 3.5% to 3.49m existing homes available for sale, which represents an 8.6-month supply at the current sales pace, up from a 7.5-month supply in January.

According to the federal mortgage finance guarantor, Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.95% in February from 4.76% in January; the rate was 4.99% in February 2010.

Single-family home sales fell 9.6% to a seasonally adjusted annual rate of 4.25m in February from 4.70m in January, and are 2.7% below the 4.37m pace in February 2010.  The median existing single-family home price was $157,000 in February, which is 4.2% below a year ago.

Existing condominium and co-op sales dropped 10.0% to a seasonally adjusted annual rate of 630,000 in February from 700,000 in January, and are 3.1% lower than the 650,000-unit level one year ago.  The median existing condo price was $150,400 in February, down 11.1% from February 2010.

Regionally, existing-home sales in the Northeast fell 7.2% to an annual pace of 770,000 in February and are 8.3% below February 2010.  The median price in the Northeast was $230,200, down 9.5% from a year ago.

Existing-home sales in the Midwest dropped 12.2% in February to a level of 1.01m and are 9.0% lower than a year ago.  The median price in the Midwest was $122,000, which is 5.4% below February 2010. 

In the South, existing-home sales fell 10.2% to an annual pace of 1.84m in February but are unchanged from February 2010.  The median price in the South was $134,600, down 3.9% from a year ago.

Existing-home sales in the West declined 8.0% to an annual level of 1.26m in February and are 2.4% below a year ago.  The median price in the West was $190,000, which is 5.2% below January 2010.

CNBC's Diana Olick has the data on home sales from the month of February:

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