Home resales

The National Association of Realtors just reported that existing home sales increased 4.3 percent to an annual rate of 4.57 million units last month, the fastest pace since May 2010.

All four regions of the country experienced home resale gains in January. But, here in the Western region we experienced the largest gain in home resales with 8.8% increase! the sales figures were tempered somewhat by the large revision in the in the home resale numbers for December 2011. December’s sales data was revised down to show only a 4.38 million unit sales rate rather than the previously reported 4.61 million unit pace.

A number of economist attribute the January increase in home resales to the very mild winter weather. But, the economist to believe that this is a very good sign of a strengthening US housing market.

keep in mind, this report is focused on the number of home resale and not the price of the homes themselves. When one looks at the home resale price data,  the national median home sales price fell 2 percent to $154,700 in January from a year ago.

Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York said: “We think the foreclosure process will accelerate, which will speed up the flow of distressed inventory. We expect supply to edge back to eight months this year, that would increase the downward pressure on prices.”

Home resales – key to base building

So, let’s hope that home resales continue to improve because this will reduce the available inventory of homes for sale and thereby build a solid floor for potential home price appreciation perhaps as early as the fourth quarter of 2012.