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Home sales rise in February

Home sales in Austin and Albert Lea increased in February, as buyers apparently sought to take advantage of low interest rates before an expected rise.

Austin home sales increased 36 percent from February 2010 to 15, and Albert Lea sales increased 25 percent to 15.

"I think it's a great sign," said Joe Sutherland, broker-owner of Counselor Realty in Rochester. "I'm thinking this year is going to be a lot better than last year."

Nationwide home sales are increasing as well, as January home sales were up 22 percent from October, the biggest three-month gain since the end of a homebuyer tax credit. They were up 5.3 percent from a year earlier and a seasonally adjusted 2.7 percent from December, the National Association of Realtors reported.

Analysts speculate that people want to buy before an expected rise in mortgage rates.

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In addition, home prices have fallen in some areas. The median sales price stayed the same at $79,700 in Austin, and it increased 10 percent to $71,750 in Albert Lea in February. But mounting foreclosures pushed the median price for a U.S. existing home to $158,800 in January, the lowest level since 2002, according to the National Association of Realtors.

Other markets also saw encouraging news, with Winona sales increasing 7.1 percent to 15 and Rochester sales increasing 4.1 percent to 76.

Also in Austin, the average days on market dropped 16 percent to 106, and pending listings increased 70 percent to 29. In Albert Lea, days on the market dropped 1 percent to 185, and pending listings dropped 11 percent to 16.

The nationwide home sales rally began as mortgage rates started to rise from record lows in November and the economic expansion picked up speed.

"The job market is beginning to gain traction, consumer confidence is improving, and even though mortgage rates have increased, they’re near historic lows," said Mark Zandi, chief economist of Moody’s Analytics Inc. in West Chester, Pa. "Prices may go down a bit more, but we’re still seeing a pop in sales."

The average rate for a 30-year fixed mortgage was 4.87 percent last week, almost three-quarters of a percentage point above the record 4.17 percent in mid-November, based on data from McLean, Virginia-based Freddie Mac, the No. 2 mortgage-finance company. It may be close to 6 percent by the end of the year, according to a forecast by the Mortgage Bankers Association in Washington.

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