By Dow Jones Business News, February 21, 2013, 10:35:00 AM EDT
U.S. January Existing-Home Sales Rise 0.4%
WASHINGTON -- Sales of previously owned homes grew slightly last month, but the supply of homes for sale contracted to
the lowest level in more than 13 years, a sign of tightening conditions in a recovering housing market.
Existing-home sales increased 0.4% from a month earlier to a seasonally adjusted annual rate of 4.92 million, the
National Association of Realtors said Thursday. Sales were 9.1% above the same month a year earlier.
As the housing market turns the corner from the depths of the housing bust and fewer foreclosures are put up for sale,
the number of homes on the market continues to fall.
The inventory of previously owned homes listed for sale at the end of January contracted to 1.74 million, the smallest
supply since December 1999. That represented a 4.2-month supply at the current sales pace, the lowest level since April
2005. It took 71 days, on average, for homes to be sold in January, compared with 99 days last year, the Realtors group
Lawrence Yun, the Realtors' chief economist, said the thin supply of homes on the market can be relieved by increased
construction activity. But he argued that homebuilders are being hampered by Washington regulations that constrain
lending for building projects.
The monthly results were stronger than analysts' forecasts. Economists surveyed by Dow Jones Newswires had forecast
sales would fall by 1% from the originally reported December figure to a pace of 4.89 million.
The previous month's figures were revised downward to a reading of 4.90 million from an originally reported pace of
The median price of homes sold in January was $173,600, up 12.3% from $154,600 a year earlier. Compared with a month
earlier, sales grew in three out of four U.S. regions. They grew by 4.8% in the Northeast, 3.6% in the Midwest, and 1%
in the South, but fell 5.7% in the West.
The housing market helped pull the economy into the recession that started in December 2007, and was a drag on the
early part of the recovery. However, it has contributed to the economy for the past seven quarters, adding 0.36
percentage point to overall economic activity in the fourth quarter of last year -- a period in which the economy shrank
Many economists believe housing will be one of the main drivers of the economy this year as builders gradually ramp up
construction, which has been well below historical levels. Last year, builders started construction on about 780,000
homes, the highest since about 906,000 in 2008.
While foreclosures are still high, the share of delinquent mortgages has been declining over the past three years.
Lenders and other mortgage companies are also facing new processing requirements for foreclosures in some states, such
as California, that have led to further declines in foreclosed-property listings.
Still, foreclosures remain a drag on the market in many parts of the country. Plus, qualification standards for
mortgage loans remain tough and many potential buyers have too little home-equity to sell their current home and buy
-Nick Timiraos contributed to this report
-Write to Alan Zibel at email@example.com and Sarah Portlock at sarah. firstname.lastname@example.org.
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