U.S. home sales rise in January as prices fall

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Sales of U.S. homes rose for the third month in a row in January, an industry group said Wednesday, as the market experienced an increase in cash buyers and more foreclosures sold.

With so-called distressed sales high and demand weak, home prices have been experiencing a renewed decline in recent months. The national median home price was $158,800 in January, the lowest level in nine years, according to Reuters.

The National Assn. of Realtors said sales of previously owned homes were up 2.7% from December, to a seasonally adjusted annual rate of 5.36 million homes. That was an increase of 5.3% from January 2010.

The real estate group has faced questions in recent weeks from economists about the way it reports its widely followed sales number. The Santa Ana analytics firm CoreLogic, for instance, estimates that the group overstated home sales by 15% to 20% in 2010.

Walter Molony, a spokesman for the real estate group, said its researchers are studying the matter and that CoreLogic’s estimates are “premature at best.” But Molony said the real estate group does plan to publish revisions this summer and has been in discussions with other economists and government agencies about its estimates.

If the group was to revise its sales numbers down it would be significant because that means there is probably more supply on the market than previously estimated. An excess of homes on the market contributes to downward pressure on home prices, particularly when buyers are scarce.

The group said that total housing inventory at the end of January fell 5.1% to 3.38 million existing homes available for sale, representing a supply of about seven months and just more than two weeks.

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-- Alejandro Lazo