WASHINGTON DC – Existing-home sales rebounded in February, climbing above expectations, but prices plunged again. Regionally, sales rose 15.6 percent in the Northeast, 6.1 percent in the South, 2.6 percent in the West and only 1 percent in the Midwest.

Home resales climbed to a 4.72 million annual rate, a 5.1 percent increase from January’s unrevised 4.49 million annual pace, the National Association of Realtors said Monday, as reported by the Wall Street Journal.

Foreclosures and short sales reflect about 45 percent of total existing-home sales. Distressed properties are discounted, so the abundance of these sales prices new homes out of the market, discouraging construction and weakening the overall housing sector further.

With so many distressed sales, the median price for an existing home fell last month. At $165,400 in February, the median price was down 15.5 percent from $195,800 in February 2008. The median price in January this year was $164,800. The 15.5 percent plunge is the second biggest ever, behind January’s 17.5 percent drop.

The sharp tumble in prices, falling because of bloated inventory, is restraining demand. Monday’s data showed inventories of previously owned homes rose 5.2 percent at the end of February to 3.8 million available for sale, which represented a 9.7-month supply at the current sales pace. There was a 9.7-month supply at the end of January.

The February resales level of 4.72 million reported Monday by NAR was above Wall Street expectations of a 4.48 million sales rate for previously owned homes. The 5.1 percent increase was the largest since 5.6 percent in July 2003.

“This is a rebound from January,” said NAR economist Lawrence Yun. “Home sales are still very soft.” Yun added that realtors hope the Obama administration’s economic stimulus helps the market in the next few months.

The average 30-year mortgage rate was 5.13 percent in February, up from a record low 5.05 percent in January, according to Freddie Mac. The rate was 5.92 percent in February 2008.

But lower lending rates don’t change the facts: Credit is tight and layoffs have been rising. Since the recession began in December 2007, the economy has shed 4.4 million jobs, including 651,000 jobs last month. Previously owned home sales, year over year, were down 4.6 percent from the pace in February 2008, Monday’s report said.

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