U.S. home resales rose to a 11/2 year high in January, pushing the supply of properties on the market to the lowest level in almost seven years in a hopeful sign for the housing sector.
And the Augusta area saw the highest January sales numbers since 2008.
The National Association of Realtors said on Wednesday that existing home sales increased 4.3 percent to an annual rate of 4.57 million units last month, the fastest pace since May 2010.
It was the latest sign the housing market might be coming off the floor. While economists attributed some of the rise to unseasonably warm winter weather, they also said it signaled genuine improvement.
There were 299 homes sold in January, according to the Greater Augusta Association of Realtors. The last time it was higher was in January 2008, when 309 homes were sold that month. The results come on the heels of a high December. Similar sales figures – 429 homes sold – haven’t been seen since December 2006.
Sales were up across all four regions of the country, with the West recording the biggest gain – an 8.8 percent increase.
“At least some of the improvement in the last few months could have reflected milder winter weather, but for the most part, it seems that the housing sector may have turned the corner,” said Guy Berger, an economist at RBS in Stamford, Conn.
The tenor of the report was weakened somewhat by a sharp downward revision to December’s sales data to show only 4.38 million unit sales rate rather than the previously reported 4.61 million unit pace.
A brightening economic outlook, marked by a strengthening labor market and buoyant factories, is giving the housing market some lift. Confidence among homebuilders is near five-year highs and they are breaking more ground on housing projects.
Residential construction is expected to contribute to growth this year for the first time since 2005.
The U.S. housing market had been held back by an overhang of unsold homes, but steady sales gains are helping to whittle down supply.
The inventory of unsold homes on the market fell 0.4 percent to 2.31 million last month, the lowest since March 2005. That represented a 6.1 months’ supply at January’s sales pace, the lowest since April 2006 and down from 6.4 months in December.
However, inventories tend to fall in winter and the decline last month could also be reflecting delays in the process of bringing foreclosed properties to the market.
A supply of six months generally is considered ideal.
“We think the foreclosure process will accelerate, which will speed up the flow of distressed inventory. We expect supply to edge back to eight months this year,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York.
That would increase the downward pressure on prices. The median home sales price fell 2 percent to $154,700 in January from a year ago.
The median sales price in Augusta is short of the national figure, $142,900, slightly lower than December, but much better than the sales prices in October and November, according to local data.