Falling prices and first-time buyers bargain-hunting for foreclosed properties helped drive up nationwide sales of existing homes 5.1% in February from the previous month.
Sales of existing homes rose to a seasonally adjusted annual rate of 4.72 million units in February from 4.49 million units in January, the National Assn. of Realtors said Monday.
Still, last month's sales total represents a 4.6% decline from February 2008.
The rebound in February can be partly credited to January's especially dismal sales figures. The January total was the weakest showing since July 1997 and was an 8.6% drop from January 2008, said Lawrence Yun, an economist for the Realtors group.
"You have to put it in perspective," he said. "January's rates were exceptionally low."
Contributing to February's increase was a continued decline in prices, the Realtors group said.
The median home sale price dropped about 3% in February to $165,400 from $170,300 in January. Prices have declined in each of the last 30 months, except August 2007, when there was a 0.1% increase.
February's median sale price was 15.5% lower than the $195,800 a year earlier.
Yun said rising joblessness and diminishing liquidity made discounted homes the most attractive segment of the market.
"The areas most active were homes with the biggest price declines," he said. "Within those areas, buyers were looking at lower price points, indicating they want to stay within their budget. They don't want to stretch."
Homes facing foreclosure accounted for about 45% of sales last month.
First-time buyers, many lured by a new $8,000 tax credit, were estimated to have accounted for nearly half of February's sales, up from 10% to 15% in a normal Feburary.
"We can't say things have bottomed out yet," Yun said. "But it's safe to say the second half will be better than the first half of 2009 because of the home-buyer credit."
The Realtors group said inventory rose 5.2% in February to 3.8 million units. That's equal to a 9.7-month supply, unchanged from January.