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2/23/2016 10:10:00 AM Write a Letter to the Editor Write a letter to the Editor

Sales of Existing US Homes Rise to Second-Highest Level Since 2007

Luke Sharrett/Bloomberg News

Sales of previously owned U.S. homes unexpectedly rose in January to the second-highest level since early 2007, indicating the industry will keep prospering.

Closings, which usually take place a month or two after a contract is signed, advanced 0.4% to a 5.47 million annual rate, the National Association of Realtors reported Feb. 23 in Washington. Prices climbed from January 2015 as the number of dwellings on the market fell.

Near record-low mortgage rates, steady job gains and better wage growth are helping encourage prospective buyers, including first-time purchasers. Further strengthening in residential real estate will support the economy and make up for weakness in manufacturing tied to weaker global growth.

“When people are confident about their job and income-earning prospects, they will borrow and they will buy,” David Berson, chief economist at Nationwide Insurance in Columbus, Ohio, said before the report. “We expect home sales to continue to improve this year.”

The January sales pace was the second-strongest since February 2007. The median forecast of 78 economists surveyed by Bloomberg called for a 5.32 million annualized rate, with estimates ranging from 5.08 million to 5.55 million. December’s pace was revised to 5.45 million from an originally reported 5.46 million.

Compared with a year earlier, purchases increased 7.5% in January before adjusting for seasonal variations.

The data were volatile in the last two months of 2015 after a change in regulations aimed at consolidating the closing process. The introduction of new forms used by lenders and title companies led to delays in November signings that were subsequently made up in December.

Another report Feb. 23 showed home values in 20 U.S. cities steadied in the year ended December, putting residential real estate on healthier footing to contribute to the economic expansion.

The S&P/Case-Shiller index of property values increased 5.7% from December 2014, the same as in the year ended November, the group said. Nationally, prices climbed 5.4%.

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By Michelle Jamrisko
Bloomberg News

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