Headline sounds great, no? Home Sales Rise Unexpectedly in Feb. But what about the story?
The increase pushed sales up to a seasonally adjusted annual rate of 6.69 million units, still 3.6 percent lower than a year ago. Sales fell by 8.5 percent for all of last year as housing hit a sharp slowdown after setting sales records for five straight years.
… “Sales cannot be sustained at this level, which is way above the pace implied by mortgage applications,” said Ian Shepherdson, chief economist at High Frequency Economics.
The price of a median home sold last month dropped to $212,800, down by 1.3 percent from the same month in 2006. It marked a record seven straight months that the median home prime has fallen compared to the same period a year ago.
… “Our view is that the tightening in the subprime market will have a negative impact on home sales,” Lereah said. “It probably won’t postpone the recovery (in housing) but it will slow it.” [emphasis added]
So the real story is year-over-year sales are down 3.6 percent and EVERYONE expects things to get worse.
Nice headline, though.