A Glimmer of Hope for the Housing Market?

Sales of existing homes increased by nearly 3 percent in February—significantly stronger than the consensus estimate of a slight decrease. The upbeat figures were driven in part by an upswing in activity in the Northeast, where sales jumped more than 11 percent.

It was the first time existing-home sales have risen since last July.

But Robert Brusca, chief economist at FAO Economics, cautions against getting overly excited about the report. "The rebound was led by an 11.3 percent spurt in the Northeast where the winter results are a weather report more than an economic report," Brusca said in a report of his own. "The Midwest and South did register gains of 2.5 percent and 2.1 percent, respectively. In the West, sales fell again by 1.1%."

The report continues:

The telling price data show us that median home prices fell by 8.2% Yr/Yr compared to a drop of only 5.3% Yr/Yr in January. The acceleration in the pace of house prices dropping is not a confirming signal for the bounce in existing home sales. Average house prices plunged by 7.2% Yr/Yr, an escalated pace of decline from January when the drop was at a 4.6% pace."