The pace of US existing home sales unexpectedly rose in February, increasing 3.9 percent to a 6.69 million-unit annual rate as mild weather spurred home buying, the National Association of Realtors said on Friday.
Economists polled by Reuters were expecting existing home sales to slide to a 6.31 million rate. It was the biggest rise since a matching increase in March 2004. Inventories of unsold homes on the market rose 5.9 percent to 3.748 million units, or a 6.7 months' supply at the current sales pace.
Woes in the subprime mortgage market are likely to cut sales of new or existing homes by up to 250,000 a year over the next two years, NAR economist David Lereah said. The rise in existing home sales in February marked the third straight increase, the first time sales have risen three months in a row since the period ended in June 2004.
The February gain reflected a 14.2 percent rise in existing home sales in the Northeast, which was likely the result of unseasonably warm temperatures in December and January, Lereah said. The median existing home sales price was $212,800, down 1.3 percent from February 2006.