Housing reports show strengthening market
WASHINGTON -- Two reports on home sales Tuesday show a market that is recovering but still vulnerable -- home prices rose in January, but the pace of new home sales fell in February.
The Standard & Poor's/Case-Shiller 20-city January home price index showed home prices rose 8.1 percent in the 12 months ending in January, up from a 6.8 percent annual gain in December.
However, a U.S. Commerce Department report indicates that sales of new homes dropped 4.6 percent from January at a seasonally adjusted annual rate.
The Case-Shiller report indicated prices rose in all 20 cities, led by a 23 percent gain in Phoenix. Prices rose in 11 of 20 cities on a month-over-month basis. Those numbers are not seasonally adjusted and reflect the slower winter buying period.
The Commerce Department report showed sales of new homes dropped to a seasonally adjusted annual rate of 411,000 in February, a decline of 4.6 percent from the January level of 431,000, which had been the strongest sales pace since September 2008.
The decline in February still left sales 12.3 percent higher than a year ago.
While sales remain below the 700,000 level considered healthy, the housing recovery is gaining strength and is starting to look sustainable. Steady job creation and near record-low mortgage rates are spurring sales.
The median price of a new home sold in February was $246,800, up 2.9 percent from a year ago, the Commerce report said.