US home sales see surprise 5.1 per cent gain

US existing home sales saw a surprise rebound last month, rising 5.1 per cent to a stronger-than-expected annual pace of 4.72 million units, according to the National Association of Realtors.

The rise marked a hopeful sign for a sector reeling over more than two years, but the industry group cautioned that sales remained weak and prices continued to fall.

The national median existing-home price for all housing types was €120,000 last month, down 15.5 per cent from a year ago.

The level of home sales was well above expectations of an annual pace of 4.45 million but it remained down 4.6 per cent from a year ago.

"Seasonal adjustment factors are more volatile in winter months, but sales rates over the past few months show dampened sales activity," the association said.

Lawrence Yun, NAR chief economist, said first-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges.

"Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 per cent of transactions last month," he said.

"Our analysis shows that distressed homes typically are selling for 20 per cent less than the normal market price, and this naturally is drawing down the overall median price."

Still he said the sharp drop in the median "doesn't equate to a similar loss of value for traditional homes in good condition".