Investors, cheap homes fuel 4.3 percent sales rise in January

A sale pending is pending at this home in Mount Lebanon, Pa. ASSOCIATED PRESS Enlarge

WASHINGTON — Sales of previously occupied homes rose in January to the highest pace in nearly two years, flashing modest signs of health ahead of the spring-buying season.

The National Association of Realtors said Wednesday that home sales increased 4.3 percent last month to a seasonally adjusted annual rate of 4.57 million. That’s the highest level since May, 2010.

Home sales have risen in three of the past four months. But they remain well below the 6 million that economists equate with a healthy market.

The report offered a mixed picture of the slowly improving housing market. The number of first-time buyers, who are critical to a housing recovery, increased slightly to make up 33 percent of all sales. That’s still below 40 percent, which tends to signal a healthy market.

Sales of homes at risk of foreclosure also increased to 35 percent of all purchases. Those sales hurt the market by lowering broader home prices.

The Realtors group also revised December’s sales figures to show a 0.5 percent decline. It had initially reported a 5 percent increase.

Economists say conditions are improving and that could mean further gains this year. Prices have declined. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might be open to buying this year — and they responded in January to that interest by requesting more permits to construct single-family homes.

Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound. In January, employers added 243,000 net jobs — the most in nine months — and the unemployment rate fell to 8.3 percent, the lowest level in nearly three years.