The pace of U.S. existing home sales unexpectedly rose in February, increasing 3.9% to a 6.69 million-unit annual rate as mild weather spurred home buying, the National Association of Realtors said.
Economists were expecting existing home sales to slide to a 6.33 million rate. It was the biggest rise since a matching increase in March 2004.
Inventories of unsold homes on the market rose 5.9% to 3.748 million units, or a 6.7 months' supply at the current sales pace.
Investors will get another look at the ailing housing marker Monday, when the government reports new home sales for February. The consensus is for sales to rise to annual rate of 995,000 units, up from 973,000 in January.
Meanwhile, the House Financiial Services Subcommittee on Financial Institutions will hold a hearing on the subprime lending mess Tuesday March 27, following a similar one by the Senate Banking Committee March 22.
Woes in the subprime mortgage market are likely to cut sales of new or existing homes by up to 250,000 a year over the next two years, NAR economist David Lereah said.
The rise in existing home sales in February marked the third straight increase, the first time sales have risen three months in a row since the period ended in June 2004.
The February gain reflected a 14.2% rise in existing home sales in the Northeast, which was likely the result of unseasonably warm temperatures in December and January, Lereah said.
The median existing home sales price was $212,800, down 1.3% from February 2006.