5 April 2008 - After months of bad news for the U.S. housing sector, one recent report suggests now might be the start of a turnaround for housing across the country.

The results of the National Association of Realtors' February home sales report caught many analysts off guard - instead of a decline, sales of existing homes actually increased 2.9 percent from January.

The rise, the biggest in a year and the first gain in seven months, came as a surprise to economists who had expected a drop. Though the one-month statistics do not yet show a trend, analysts say the numbers give some confidence.

"The housing market seems to be giving the first indications of stabilizing at least in terms of home purchases," Pierre Ellis, senior economist at Decision Economics, told NBC "Today."

NAR chief economist Lawrence Yun also said the gain is encouraging.

"We're not expecting a notable gain in existing-home sales until the second half of this year, but the (February) improvement is another sign that the market is stabilizing," he said.

Ellis and Yun aren't alone in thinking there may be some turnaround in the months ahead. Just last week the director of the Office of Federal Housing Enterprise Oversight said he is seeing signs of stabilization in the nation's housing sector. James Lockhart told CNBC there were "some good signs" that the downturn may be approaching an end.

In its February report, the National Association of Realtors said sales were up 11.3 percent in the Northeast, 2.5 percent in the Midwest and 2.1 percent in the South. Sales in the West, however, were down 1.1 percent, likely the result of the substantial speculative buying that occurred in California, Nevada and Arizona.

On a local level, sales of Wasatch Front homes bucked the downward trend in the West and mirrored the increase reported nationally.

Along the Wasatch Front, sales of existing single-family homes and condominiums were up about 15 percent from January 2008 to February 2008, climbing from 1,293 transactions to 1,526 transactions, according to data from the Utah Association of Realtors.

Salt Lake County sales were up nearly 19 percent while sales in Utah, Davis and Weber counties were up 5, 23, and 29 percent, respectively.

Economists and Realtors are attributing the recent rise in sales to a drop in prices that is making homes more affordable and harder for buyers to resist.

The median sales price for homes and condominiums along the Wasatch Front in February was $210,100, a slight decrease from the median price of $215,700 reported in January.
Between the lower prices and historically low mortgage rates, a home purchase is becoming a much more viable option for local buyers who had been waiting on the sidelines.

According to mortgage company Freddie Mac, the monthly average commitment rate on a 30-year, conventional, fixed-rate mortgage was 5.92 percent in February 2008 compared to the higher rate of 6.29 percent a year ago - a difference which could save buyers thousands of dollars in interest over the life of their mortgage.

"The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers," Yun said.

Although we can't be sure of the trends that will happen in the next few months, what is clear is that there are a number of opportunities for buyers. With greater negotiating power and more choices, it's no wonder we're seeing more buyers deciding now is the time for them to take a look at the market.