US home sales increased by 8% year on year in February and 3.8% month on month, according to the latest data from CoreLogic.
Sales rose to a non-seasonally adjusted annual sales pace of 4.09 million and the monthly rise was the highest sales pace for the month of February since 2007.
Improvement in February home sales were led by newly constructed homes which increased by 23%, followed by re-sales which increased by 18%, the data also shows.
Distressed sales, which include real estate owned (REO) and short sales, were on the decline, continuing the trend in the shift towards healthy home sales.
Distressed sales accounted for 15.6% of total sales in February, a strong improvement from the same time a year ago when they made up 22.8% of total sales.
REO sales were down 16% year on year, making up 11.4% of total sales while short sales were down 44% year on year, at just 4.3% of total sales in February.
At its peak, the distressed sales share totaled 32.7% of all sales in January 2009, with REO sales making up 28.2% if that share. The firms says that the more recent shift away from REO sales is a driver of improving home prices, as REOs typically sell at a larger discount compared to healthy sales than do short sales.
‘There will always be some amount of distress in the housing market, so one would never expect a 0% distressed sales share, but the pre-crisis share of distressed sales was traditionally about 2%,’ the report explained.
Michigan had the largest share of distressed sales of any state at 30.5% in February, followed by Illinois at 26.6%, Nevada at 26%, Florida at 24.8% and Georgia at 23.5%.
California saw a 17.8% point drop in the distressed sales share, the largest of any state. Of the largest 25 Core Based Statistical Areas (CBSAs), Chicago-Naperville-Arlington Heights had the largest share of distressed sales at 29.5% followed by Miami-Miami Beach-Kendall at 27.9%, Las Vegas-Henderson-Paradise at 27.2%, Orlando-Kissimmee-Sanford, at 27% and Tampa-St. Petersburg-Clearwater at 25.5%.
Sacramento-Roseville-Arden-Arcade had the largest drop in its distressed share, falling by 21.7% from 41.6% in February 2013 to 19.9% in February 2014.
This article was republished with permission from Property Wire.