US home sales rise 2.7 per cent

Sales of previously-owned US homes rose unexpectedly in January, but prices tumbled to the lowest in nearly nine years, a US industry group has said.

The National Association of Realtors said sales climbed 2.7 per cent month on month to an annual rate of 5.36 million units from a downwardly revised 5.22 million pace.

Compared with January last year, sales were up 5.3 per cent. The median home price fell 3.7 per cent from a year-ago to $158,800 (£98,217), the lowest since April 2002.

Barclays Capital economist Michael Gapen in New York said it had expected unit sales to rise to a 5.25 million-unit rate in January and the analyst consensus was for a 5.22 million-unit rate.

“The recent activity provides further evidence that the housing market has stabilised,” he said.

“We expect the recent improvement in home sales to persist, albeit at a more moderate pace than observed in the second half of 2010. We see sales as supported by continued improvements in labour market conditions, but constrained by tight credit standards and higher mortgage rates.”

The NAR has been accused of over-counting existing home sales. The Wall Street Journal on Monday quoted California real estate analysis firm, CoreLogic, as saying the NAR could have overstated home sales by as much as 20 per cent.

NAR dismissed the claim and chief economist Lawrence Yun told reporters: "I would be highly surprised if it was 20 per cent."

The NAR also revised the sales rates for the past three years, which showed 2010 sales little changed.