March 22 (UPI) -- Existing home sales surged 11.8 percent in February from January, the strongest boost the industry has since December 2015, the National Association of Realtors said Friday.
Existing homes transactions included single-family homes, townhomes, condominiums and co-ops. February sales rose at an adjusted rate of 5.51 million in February. The association added, though, that the February sales were down 1.8 percent compared with a year ago.
"A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound," Lawrence Yun, the association's chief economist, said in a statement.
"It is very welcoming to see more inventory showing up in the market. Consumer foot traffic consequently is rising as measured by the opening rate of SentriLock key boxes," he added.
The slow growth of home price appeared to have helped as well. The association said that prices were up 3.6 percent in February, the smallest gain in several years.
"You can see we're still trending to moderation, as years of high price gains has offset the benefit of lower rates," Peter Boockvar, chief investment officer at Bleakley Advisory Group, said. "The much more timely weekly mortgage applications is seeing flat growth year over year, but let's hope that the spring selling season will see a pick-up in transactions."
The West saw the largest percent increase in existing home sales, improving 16 percent from February to January, followed by the South with a 14.9 percent increase. While home sales in the Northeast were identical over between January and February, the Midwest increased 9.5 percent.
"For sustained growth, significant construction of moderately priced-homes is still needed," Yun said. "More construction will help boost local economies and more home sales will help lessen wealth inequality as more households can enjoy in housing wealth gains."