LITTLE ROCK — Sales of previously owned U.S. houses held in February near an almost two-year high, adding to evidence that the market that triggered the recession is firming.
Purchases dropped 0.9 percent to a 4.59 million annual rate in February from a revised 4.63 million pace in January that was faster than previously estimated and the highest since May 2010, the National Association of Realtors said Wednesday.
“The U.S. housing market is stabilizing, and very gradually carving out a recovery,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Housing demand should pick up in response to falling unemployment and attractive affordability.”
The past two months made up the best winter for sales of previously occupied homes in five years, when the housing crisis began.
Lawrence Yun, the chief economist of the trade group, said he expects the gains to be sustainable, noting that unlike last year the pickup was across the country, and citing Pittsburgh; Providence, R.I.; Kansas City, Mo.; and Minneapolis among the areas of strength.
“Our [real-estate agent] members are very enthusiastic,” Yun said. “Buyers are very serious. Last year they were kicking the tires.”
Yun acknowledged that unusually warm weather helped sales this winter but said that wasn’t the only factor.
“Weather may have helped, but there’s something more genuine that is lifting January and February sales,” he said.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said lower February sales numbers “should not detract from the key point, which is that sales are trending upward.”
The sales pace remains far below the 6 million that economists equate with healthy markets. And the number of first time buyers, who are critical to a housing recovery, continues to lag behind normal levels, while foreclosures remain high.
The median sales prices of homes rose for the first time in four months in February, to $156,600. And the supply of homes on the market increased more than 4 percent in February to 2.43 million, which could signal that more homeowners became confident in the housing market.
“Business is getting better gradually,” said John Huebner, owner of Century 21 Real Estate Professionals, a brokerage with 210 sales agents in Orlando, Fla. “People are moving, and houses are selling, and that’s good for us.”
More people are searching for homes online, giving his brokers more leads on sales as shoppers seek to take advantage of low interest rates and prices, Huebner said.
“If homes are priced well and in good condition, we’re seeing multiple offers,” he said.
There have been other signs of improvement in the depressed housing market.
Homebuilders have grown more confident in the past six months after seeing more people express interest in buying homes. In February, they requested the most permits to build houses since October 2008.
Mortgage rates are near record lows. And the supply of homes fell in January to its lowest level in seven years.
A lower supply helps push up prices, which lures more sellers into the market and generally improves the quality of houses for sale. Rising prices also boost sales because buyers want to invest in homes that are appreciating in value.
A key reason for the brighter housing outlook is that the job market has strengthened. From December through February, employers added an average of 245,000 jobs a month. The national unemployment rate has fallen to 8.3 percent, the lowest in three years. In Arkansas, the unemployment rate in January was 7.6 percent.
Still, economists caution that the damage from the housing bust is deep and the industry is years away from fully recovering.
Sales among first-time buyers, who are critical to a housing recovery, fell slightly last month to 32 percent of all purchases. That’s down from 33 percent in January. In healthy markets, first-time buyers make up at least 40 percent.
And homes at risk of foreclosure made up 34 percent of sales, down only slightly from 35 percent in January. In more stable markets, foreclosures make up less than 10 percent of sales.
For the past few years, the market has been saturated with foreclosures. That has put downward pressure on prices and driven away buyers.
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. Some deals have been scuttled before their closings because banks declined mortgage applications, home inspectors found problems, appraisals showed homes were worth less than the bids, or buyers lost their jobs.
One-third of Realtors say they’ve had at least one contract scuttled in each of the past five months. That’s up from just 18 percent in September.
Sales were mixed across the country. They rose on a seasonal basis of 1 percent in the Midwest and 0.6 percent in the South. They dropped 3.2 percent in the West and 3.3 percent in the Northeast.
Information for this article was contributed by Derek Kravitz of The Associated Press; Timothy R. Homan, Lorraine Woellert, Chris Middleton and John Gittelsohn of Bloomberg News; and Steve Goldstein of MarketWatch.
Front Section, Pages 1 on 03/22/2012