The pace of home re-sales in the United States picked up by 5.2 percent in February, defying forecasts for a slowdown, as warm weather boosted single-family and condo sales, according to trade group data on Thursday that showed a pause in the market's cool-down.
Sales of existing US homes rose to a 6.91 million unit annual rate in February, halting a string of monthly declines, after January's upwardly revised 6.57 million unit pace, the National Association of Realtors said.
Analysts had expected sales to slow to a 6.50 million unit pace in February, and the surprising increase sent the dollar rallying against the euro. It pushed US Treasury debt prices lower, and stock prices for major US homebuilders climbed. "The number was a lot stronger than the market had been expecting," said Ronald Simpson, managing director of global currency analysis at Action Economics LLC in Dobbs Ferry, New York.
The Realtors' group called February's sales figures an aberration due to both warm weather and lower mortgage rates in January that boosted buying activity.
The group's chief economist said the pace of home resales should start to slow again next month.
A separate report showed new claims for US jobless benefits fell by a larger-than-expected 11,000 last week, suggesting a healthy labour market and more job growth in March.
The Labour Department said the number of Americans filing initial claims for state unemployment aid fell to 302,000 in the week ended March 18 from an upwardly revised 313,000 in the prior week. It was the first drop in claims after three straight weekly increases.
Economists had expected jobless claims to dip to 305,000 from the 309,000 initially reported for the week ended March 11.
The increase in total existing home sales - the biggest in two years - was driven by a 4.7 percent gain in the pace of single-family sales and an 8.8 percent jump in condo sales in February, the Realtors data showed. But inventories also climbed 5.2 percent, leaving 3.03 million existing homes available for sale. That equates to 5.3 months' supply at the current sales pace.
While the sales pace increased, price appreciation slowed.
The median existing home price in February was $209,000, up 10.6 percent from a year ago. That is below the larger double-digit monthly increases posted in recent years, the group's data showed. Condo price appreciation stood at 3.5 percent in February. February's pick-up in the pace of existing home sales signalled a pause in the housing market slowdown that began in fall 2005.
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