Housing market reheats in Feb.

March 24, 2006|By NEW YORK TIMES NEWS SERVICE

Sales of existing homes in the United States unexpectedly surged in February after falling for five months in a row, the National Association of Realtors reported yesterday, reflecting a lift related to unseasonably warm weather and signaling that the housing market is healthier than some experts had suggested.

Sales climbed 5.2 percent last month, to an annual pace of 6.91 million homes, after falling 8.9 percent in the previous five months. The nationwide median price -- the point at which half the homes sold for more and half for less -- climbed 10.6 percent from a year earlier, to $209,000.

The number of homes for sale, however, continued to climb, rising by 5.2 percent, to 3.03 million, which at the current sales pace amounts to a 5.3-month supply of homes.

Analysts, who had expected sales to fall to a pace of 6.5 million, warned that the increase could not yet be considered a turning point.

Several other real estate gauges, including mortgage applications, interest rates and pending home sales, have indicated that sales are slowing.

An unusually warm January appears to have played some role in the sharp increase in sales. Warmer weather allows more people to venture out, and sellers often use the opportunity to hold open houses. The Realtors association counts homes as sold at the closing, which typically happens one to two months after contracts are signed.

Sales soared 19.2 percent in the Northeast, the biggest monthly increase ever recorded for the region, and 11.1 percent in the Midwest, the largest increase since 1992. Sales in the West climbed a more modest 5.1 percent, and fell 2.5 percent in the South.

Some analysts say the surge in February could mean home sales would be softer this spring. Since August, sales of existing homes have fallen 4.2 percent. Mortgage applications for home purchases have fallen by about 16 percent in the last 12 months, according to the Mortgage Bankers Association of America.

Home prices were higher than last year in all regions but were rising at a slower pace than they were last year, especially compared with the peak spring and summer months, when it was not unusual to see increases of 13 percent to 15 percent nationally.

Agents and analysts report that prices have dropped in some hot markets, and that appeared to be attracting some buyers who had been wary of local housing bubbles.

"Before, we had lots of people who were looking, but they said they weren't going to buy because they said prices were going to go down," said Chobee Hoy, an agent near Boston.

"And now we find ourselves in a very healthy market where people are not only looking at properties but making offers," Hoy said.

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