WASHINGTON (AP) — Sales of previously occupied homes rose
in January to the highest pace in nearly two years, flashing modest
signs of health ahead of the spring-buying season.
The National
Association of Realtors said Wednesday that home sales increased 4.3
percent last month to a seasonally adjusted annual rate of 4.57 million.
That’s the highest level since May 2010.
Home sales have risen in
three of the past four months. But they remain well below the 6 million
that economists equate with a healthy market.
The report offered a
mixed picture of the slowly improving housing market. The number of
first-time buyers, who are critical to a housing recovery, increased
slightly to make up 33 percent of all sales. That’s still below 40
percent, which tends to signal a healthy market.
Sales of homes at
risk of foreclosure also increased to 35 percent of all purchases.
Those sales hurt the market by lowering broader home prices.
The
Realtors group also revised December’s sales figures to show a 0.5
percent decline. It had initially reported a 5 percent increase.
Economists
say conditions are improving and that could mean further gains this
year. Prices have declined. Mortgage rates have never been lower.
Homebuilders are slightly more hopeful because more people are saying
they might be open to buying this year — and they responded in January
to that interest by requesting more permits to construct single-family
homes.
Much of the optimism has come because hiring has picked up.
More jobs are critical to a housing rebound. In January, employers
added 243,000 net jobs — the most in nine months — and the unemployment
rate fell to 8.3 percent, the lowest level in nearly three years.
Economists
caution that the damage from the housing bust is deep and the industry
is years away from fully recovering. Since the bubble burst, sales have
slumped under the weight of foreclosures, tighter credit and falling
prices.
Many can’t qualify for loans or meet higher down-payment
requirements. Even those with excellent credit and stable jobs are
holding off because they fear that home prices will keep falling.
Sales
are measured when buyers close on homes. Another problem is that many
deals are collapsing before that point. Deals have been scuttled after
banks declined mortgage applications, home inspectors found problems,
appraisals showed a home was worth less than the bid, or a buyer lost a
job.
The high rate of foreclosures has made resold homes cheaper
than new ones. The median price of a new home is roughly 30 percent
above the price of one that’s been occupied before — twice the normal
markup. Investors are taking advantage of the discounts.
Copyright 2012 The Associated Press.