Signs of recovery grow in US housing market

Washington: The battered US housing market looks to be on the mend as buyers make a tentative return and house prices stabilise.

Sales of new homes in February fell from January but jumped more than 11 per cent compared with the same month last year and prices rose, according to data released on Friday that was in line with other recent signs of a slow recovery.

Big challenges lie ahead, most notably in the form of a glut of unsold properties — many of them foreclosures — and tight lending by banks. But even if the recovery is slow and bumpy, the worst of the six-year slump seems to be over.

"The housing market is slowly coming back. It's still a depressed market, but it's getting better. We have a long way to go," said Patrick Newport, an economist at Global Insight in Lexington, Massachusetts.

New home sales slipped 1.6 per cent to a seasonally adjusted 313,000-unit annual rate in February, the lowest since October, but were up 11.4 per cent in year-on-year terms, the Commerce Department said.

The median new home price jumped 8.3 per cent to an eight-month high of $233,700. Compared with February last year, the rise was 6.2 per cent.

The report rounded off a week of mixed US housing data and followed a similar pattern seen in the bigger market for existing homes — sales also fell in February, but stayed close to their highest level in nearly two years and prices rose for the first time on a yearly basis since November 2010.

Realtors say they are seeing higher traffic volume and are moving more houses off the market than a few years ago.

"My listings are selling much more quickly compared to the past few years, even approaching 2007 pre-crash levels," said Lindsey Sanders, a Realtor with Muffley & Associates in Atlanta.

"I began seeing a meaningful uptick in open house traffic last summer and it has continued to improve. I think this is a combination of sellers finally becoming more willing to ask market prices for their homes instead of bubble-level prices."

Builders tell a similar story. An index measuring confidence among homebuilders held at a near four-year high this month and they anticipated an increase in sales over the next six months.

While the pace of home construction fell last month, permits for future projects approached a three-and-a-half year high. Much of the activity is concentrated in the multi-family segment, as demand for rentals soars.