Sales of previously owned homes rose 11.5 percent year-over-year in January, to a seasonally adjusted annual rate of 5.05 million units, up from 4.53 million units in January 2008. January sales fell from a rate of 5.44 million in December 2009, the National Association of Realtors reported.

"Most of the completed deals in January were based on contracts in November and December. People who got into the market after the homebuyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales," said Lawrence Yun, the association’s chief economist.

Sales of previously owned homes rose 11.5 percent year-over-year in January, to a seasonally adjusted annual rate of 5.05 million units, up from 4.53 million units in January 2008. January sales fell from a rate of 5.44 million in December 2009, the National Association of Realtors reported.

"Most of the completed deals in January were based on contracts in November and December. People who got into the market after the homebuyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales," said Lawrence Yun, the association’s chief economist.

Although total inventory of existing homes for sale fell slightly month-to-month (0.5 percent), to 3.27 million, that’s 9.6 percent below a year ago and the lowest level since March 2006, the report said.

January’s inventory represents a 7.8-month supply at the current sales rate, up from a 7.2-month supply the month before, the report said. A supply of six months is considered a rough equilibrium between a buyer’s market and seller’s market, with a supply greater than six months indicating a buyer’s market.

"Activity should be picking up strongly in late spring as buyers take advantage of the tax credit, which is critical to absorb distressed properties reaching the market and to continually chip away at inventory," Yun said.

"With a downtrend in the number of homes on the market, especially in the lower price ranges, values are beginning to firm but with great variance around the country."

The national median resale home price in January remained flat from a year earlier at $164,700, which the association attributes to the prevalence of distressed homes on the market. Such homes made up 38 percent of sales last month, the report said.

Existing-home sales dropped on a monthly basis in every region of the country, with the Northeast seeing the biggest drop, down 10.9 percent to an annual pace of 820,000 in January. The Northeast also saw the highest year-over-year increase in sales at 22.4 percent. The region also had the highest median price in the country at $245,300, an 8.8 percent increase from January 2009.

The South saw the second-biggest monthly drop (-7.4 percent), to an annual pace of 1.87 million, and also the second-biggest year-over-year gain, 12 percent. The region’s median price dipped 2 percent from the same month last year, to $140,200.

In the Midwest, sales fell 6.9 percent month-to-month, to 1.08 million, but rose 8 percent year-over-year. The region’s median price, $130,300, dropped 1 percent year-over-year.

The West saw the smallest month-to-month decline (-5.2 percent), to 1.28 million in January, and the smallest year-over-year increase, at 7.6 percent. The region’s median price, $203,400, fell 5.8 percent, the biggest year-over-year drop.

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