Low mortgage rates and an increase in the availability of foreclosed properties helped trigger an increase in sales of existing homes last month, the National Association of Realtors reported today.
Existing home sales increased 5.1% to a seasonally adjusted annual rate of 4.72 million units, meaning that that would be the annual rate if February's rate remains the same all year. February's numbers were 4% below those of February 2008.
About half of all home purchases last month were by first-time buyers.
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"Because entry-level buyers are shopping for bargains, distressed sales accounted for 40% to% of transactions in February," National Association of Realtors Chief Economist Lawrence Yun said in a statement. "Our analysis shows that distressed homes typically are selling for 20% less than the normal market price, and this naturally is drawing down the overall median price."
The median price for an existing home last month was $165,400, compared with $195,800 in February 2008.
The average rate for 30-year fixed-rate mortgage was 5.13% in February, compared with 5.05% in January. Last week, the rate fell to 4.98%.
Last month, existing-home sales increased in all four regions: 15.6% in the Northeast, 6.1% in the South, 2.6% in the West and 1% in the Midwest.
Compared to February 2008 sales declined in every region except the West. The Northeast, Midwest and South saw declines of 14.9%, 14% and 11.2%, respectively. In the West, sales increased 30.6%.
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