Existing U.S. home sales rise in January

February 23, 2011 03:06PM

The uptick in existing U.S. home sales continued in January, with sales rising for the third consecutive month at a pace that is now above year-ago levels, according to report released today by the National Association of Realtors. Existing home sales, which are completed transactions that include single-family homes, townhouses, condominiums and co-ops, increased 2.7 percent to a seasonally adjusted annual rate of 5.36 million in January from 5.22 million in December, and are 5.3 percent above the 5.09 million level in January 2010. This is the first time in seven months that sales activity was higher than a year earlier. NAR chief economist Lawrence Yun said the improvement is good but could be better.

“The extremely favorable housing affordability conditions are a big factor, but buyers have been constrained by unnecessarily tight credit,” he said. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.” A NAR survey shows that first-time buyers purchased 29 percent of homes in January, down from 33 percent in December and 40 percent in January 2010 when an extended tax credit was in place. Investors accounted for 23 percent of purchases in January, up from 20 percent in December and 17 percent in January 2010. All-cash sales rose to 32 percent in January from 29 percent in December and 26 percent in January 2010. “With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes,” Yun added. TRD