ICS Magazine

Existing Home Sales Soar to Record in January

February 25, 2003
WASHINGTON (Reuters) - Sales of existing U.S. homes soared 3 percent to a record rate in January, the National Association of Realtors said on Tuesday in a report showing a still-booming housing sector amid a sluggish economy.

Sales of previously owned homes rose to a seasonally adjusted annual rate of 6.09 million units from an upwardly revised 5.91 million unit pace in December, NAR said.

The sales pace topped the expectations of analysts polled by Reuters who had forecast a 5.80 million unit clip.

"This is an all time record month that we've just released," said David Lereah, NAR's chief economist. "The economy continues to be sluggish, housing continues to be strong."

Stock markets showed little reaction to the housing data, instead sliding sharply on an unexpectedly dismal report on consumer confidence from the private Conference Board. The consumer confidence index tumbled to 64.0 in February from a downwardly revised 78.8 in January.

Consumer spending and the strong housing market have been the two mainstays of the U.S. economic recovery. Home buyers have flocked to take advantage of mortgage rates at low levels not seen since the early 1960s.

"Low mortgage rates continue to work their magic allowing consumers to keep the expansion rolling," said Maury Harrris, chief U.S. economist at UBS Warburg.

The median existing home sales price in January was $160,400, up 6.7 percent from the same month in the previous year. Inventories rose to 4.5 months supply of homes on the market from 4.3 months in December.

NAR said home sales for all of 2002 were revised up slightly to 5.57 million units from a previously reported 5.56 rate.