Existing-home sales rose 2.9% to a seasonally adjusted annual rate of 5.03 million in February, the National Association of Realtors reported this morning (March 24). The increase surprised economists, who were expecting Februrary sales in the range of 4.85, and even the Realtors themselves. It was the first increase in existing home sales since July.

"We're not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing," said Lawrence Yun, NAR chief economist.

Still, sales remain 23.8% below the 6.60 million-unit level in February 2007. And the gain came at a cost: the national median price was down 8.2% from February 2007, to $195,900, and down 2.6% from $201,100 in January. That was the largest drop in the median price since NAR began tracking the series in 1999.

Total housing inventory fell 3.0% to 4.03 million, a 9.6-month supply, down from a 10.2 months in January.

Single-family sales increased 2.8% to a seasonally adjusted annual rate of 4.47 million in February from an upwardly revised 4.35 million in January, 22.9% below a year ago. The median existing single-family home price was $193,900 in February, down 8.7 percent from February 2007 and 2.4% from January.

Existing condominium and co-op sales were up 3.7 to a seasonally adjusted annual rate of 560,000 units in February from a downwardly revised 540,000 in January, 29.7% below February 2007. The median existing condo price was $211,700 in February, down 4.9% from a year ago.

Regionally, existing-home sales in the Northeast jumped 11.3% to an annual pace of 890,000, 26.4% below February 2007, with the median price up 0.4% to $264,800. The Midwest was up 2.5% to 1.24 million, 19.5% below a year ago, with prices down 7.1% from last year to $143,900. The South rose 2.1 percent to an annual rate of 1.99 million, down 22% year-over-year, with prices down 8.6% to $163,400. Sales in the West declined 1.1% to 920,000, 29.2% below February last year, at prices that were down 8.6% to $290,400.

The Realtors said that roughly half the metro areas in the country posted price increases, but the markets they pointed to with healthy increases were Oklahoma City and Trenton, N.J. "In other areas such as Sacramento, a rapid price decline has induced buyers to come into the market and sales are now rising," Yun said.