US home sales rise most in five years

Drop in joblessness seen boosting housing market
February 26, 2014 02:54PM

Home sales in the U.S. increased by 16 percent in 2013, as 428,000 houses were purchased. That’s the largest hike in five years, according to data from the Commerce Department.

In addition, homes sales last month rose substantially, up 9.6 percent over January 2013. The hike was a surprise to many industry watchers and analysts, who foresaw a flat market. The median sales price for January also increased, up 3.4 percent from the same period in 2013.

Nevertheless, real estate executives say they’re not totally convinced the housing market is headed for another up year. They point out that limited housing supply, rising borrowing costs and lenders’ tight reins on credit have tamped down on sales in recent months, Bloomberg reported.

“I’m hopeful the recovery in home sales will get back on track in the next couple of months,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, to Bloomberg. “If we continue to get solid employment growth, which was the trend last year, chances are you’ll see home sales continue their uptrend.”

The Northeast region led the sales surge with a 73.7 percent increase — the highest spike since July 2012, according to Bloomberg. Construction stars, on the other hand, dropped 16 percent to an 880,000 annualized rate, which the report attributed to delays caused by the frozen winter ground. [Bloomberg] — Angela Hunt