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Home sales rise to 3-year high

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3/25/2013 - Home sales rise to 3-year high
by Julie Schmit - USA Today

Existing home sales continued to climb in February, further evidence of a continuing recovery in the housing market. 

Home sales rose 0.8 percent in February from January to a seasonally adjusted annual rate of 4.98 million, 10.2 percent above last year's level, the National Association of Realtors saidThursday. The sales rate was the highest since November 2009, when a federal tax credit was propping up home sales. January's sales rate was also revised up to 4.94 million. Total inventory, which had been dropping for months, rose 9.6 percent at the end of the February to 1.94 million homes for sale, a 4.7-month supply at the current sales pace. That's up from 4.3 months in January. 

Listed inventory was 19 percent below a year ago and the supply is especially tight in certain areas of the country, such as in the West. With limited supply, bidding wars have broken out as buyers have little to choose from and agents have little to sell. 

But last month's inventory expansion was a strong one, said Jed Kolko, economist for website Trulia. 

Inventory has been tightening because construction levels are still low, adding little new housing stock, and homeowners are waiting to sell until they have more positive equity, Kolko said. 

He said inventory is likely to rise now through the summer because of seasonality, bringing some relief to buyers and helping boost sales. The February jump "is an early hint that the inventory crunch may finally be easing for good," Kolko said. 

In a separate report Thursday, the Federal Housing Finance Agency -- the regulator for mortgage- finance giants Fannie Mae and Freddie Mac -- said home prices rose 0.6 percent from December to January. For the 12 months ending in January, prices rose 6.5 percent. 

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