Pushed by a powerful combination of historically-low fixed mortgage rates, an $8,000 tax credit, and affordable prices, sales of existing homes jumped 5 percent in February compared with the same month last year.

The biggest gains came in the Northeast, where sales were up by nearly 16 percent, according to the National Association of Realtors. Home sales in the South came in 6 percent higher for the month; they were up by nearly 3 percent in the Western states and one percent in the Midwest.

Nationally, sales of condos rose faster than detached single family dwellings – 11.4 percent versus 4.4 percent.

Underlying the improving sales picture were continuing declines in median sales prices. Dr. Lawrence Yun, chief economist for the National Association of Realtors, noted that the downward trend in median prices – off 15 percent for the year – is being driven by high rates of distressed sales in California, Florida, Nevada and parts of the Midwest.

Though sales nationwide rose by just five percent last month, in some areas hard-hit by the boom and bust cycle, the increases in sales were far more impressive.

For example, in south Florida, sales were almost off the charts – up 68 percent for detached houses and up 71 percent for condos.

Charles Richardson, vice president for Coldwell-Banker in Dade County, told the Miami Herald that "this is the sharpest (spike in sales) we’ve seen year-over-year. It’s going to accelerate our recovery. Buyers are starting to think that prices are where they should be and that the market is near a bottom." That may be a little optimistic, but any signs of a bottom in Florida – one of the worst hit states in the U.S. – is potentially important news elsewhere.

Meanwhile, mortgage rates continue on their sharp downward track, hitting six-decade lows last week. Fixed rate thirty year loans plunged to an average 4.6 percent from 4.9 percent with one point, while 15-year rates sunk below four and a half percent according to the Mortgage Bankers Association.

For potentially hundreds of thousands of consumers waiting for the cyclical low point in the financing cycle, it looks like we’re either there or pretty close, whether for buying a house or refinancing your current loan.

Published: March 31, 2009

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.