What happened to the Bubble?
The National Association of Realtors reported Thursday that that sales of existing single-family homes and condominiums rose by 5.2 percent in February to a seasonally adjusted annual rate of 6.91 million units. This despite the predicte 5 % drop compared to last year.
The prices of homes sold in February rose to $209,000 for the nationwide median.That was 10.6 percent above the median price in February 2006.
Economists believe that both new and existing home sales will dip by around 5 percent this year as rising mortgage rates cuts into demand.
But mortgage rates seem to have perhaps stagnated because of a drop in inflation. But Lereah said all indications so far were pointing to a gradual slowdown in sales to a more sustainable pace.
By region of the country, sales rose by 19.2 percent in the Northeast and were up 11.1 percent in the Midwest and 5.1 percent in the West in February. Only the South showed weakness last month with sales there dropping by 2.5 percent from the January pace.
Lereah said sales activity at present was really a "tale of two cities" with some of the hottest markets showing declines while some medium priced markets still posting strong sales gains.
He said that sales were down by double-digit levels in such hot sales markets as Phoenix, Fort Lauderdale and San Diego. He said, by contrast, sales were up by double-digit amounts in aeas such as Indianapolis, Albuquerque and Houston.
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