U.S. home sales rise in January for third month in a row

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

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, down 3.7% from January 2010, according to data released Wednesday by the National Assn. of Realtors. The median price, the point at which half the homes sold for more and half for less, was the lowest in nearly nine years.

The group 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. December’s sales were revised downward to 5.22 million from the originally reported 5.28 million.

The real estate group has faced questions in recent weeks from economists about the way it reports its widely followed sales statistics. 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 Realtors association, said that its researchers were studying the matter and that CoreLogic’s estimates were “premature at best.” But Molony said his group did plan to publish revisions this summer and had been in discussions with other economists and government agencies about its estimates.

If the group were to revise its sales numbers lower, it would be significant because it would mean there was probably more supply on the market than previously estimated. An excess of homes for sale 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 previously owned homes available, representing a supply of about 71/2 months.

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