Housing sales getting a head start on spring

This previously occupied home in Shaker Heights, Ohio, is typical of houses like it: They have been selling at a brisk pace. ASSOCIATED PRESS Enlarge

WASHINGTON -- The housing market is flashing signs of health ahead of the spring-buying season.

Sales of previously occupied homes are at their highest since May, 2010. More first-time buyers are making purchases. And the supply fell last month to its lowest point in nearly seven years, which could push prices higher.

Sales have risen nearly 13 percent over the last six months. Although they are well below the 6 million that economists equate with a healthy market, the gains have coincided with other changes in the market that suggest more sales are coming.

The National Association of Realtors said Wednesday that resales increased 4.3 percent last month to a seasonally adjusted annual rate of 4.57 million.

Single-family home sales rose 3.8 percent. First-time buyers, vital to a housing recovery, increased slightly to 33 percent of all sales.

Sales rose across the country in January, but the Midwest saw the smallest gain, 1 percent. Sales rose on a seasonal basis by nearly 9 percent in the West, 3.5 percent in the South, and 3.4 percent in the Northeast.

One concern is the market remains saturated with homes at risk of foreclosure, which lower broader home prices. Such homes rose to 35 percent of sales.

But the supply of homes on the market has plunged to 2.3 million, the lowest level since March, 2005. At last month's pace, it would take more than six months to clear those homes. Fewer homes on the market could help boost prices over time.

But analysts caution the damage from the housing bust is deep and the industry is years away from recovering. Since the bubble burst, sales have slumped under the weight of foreclosures, tighter credit, and falling prices.

Many deals collapse before closing. A third of Realtors say they've had at least one contract scuttled in the last four months, up from 18 percent in September.