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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

US home sales surge, but supply remains a headache

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WASHINGTON: US home sales rebounded strongly in February, boosted by hefty gains in the South and West regions, but a chronic shortage of houses on the market remains an obstacle heading into the spring selling season.


The National Association of Realtors said on Wednesday that existing home sales jumped 3.0 per cent to a seasonally adjusted annual rate of 5.54 million units last month, ending two straight monthly declines.


“All signs point to a spring buying season of high prices and low inventory as any new construction that is added is snapped up quickly by buyers,” said Danielle Hale, chief economist for realtor.com.


Economists polled by Reuters had forecast existing home sales rising 0.5 per cent to a rate of 5.40 million units in February. Sales soared 6.6 per cent in the South, where the bulk of sales activity occurs, and vaulted 11.4 per cent in the West.


Sales tumbled 12.3 per cent in the Northeast and fell 2.4 per cent in the Midwest. Existing home sales, which account for about 90 per cent of US home sales, increased 1.1 per cent on a year-on-year basis in February.


There is an acute shortage of homes, especially at the lower end of the market. According to the NAR, sales of houses priced below $100,000 plunged 17 per cent from a year ago. Sales of properties in the $100,000-$250,000 price range slipped 1.0 per cent on a year-on-year basis.


The Realtors group said there was double-digit sales growth for houses costing $250,000 and above. Houses for sale typically stayed on the market for 37 days in February, down from 41 days in January and 45 days a year ago. Forty-six per cent of homes sold in February were on the market for less than a month. — Reuters


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