As distressed home sales continued to remain the dominant force in the nation’s impaired housing market, the number of existing homes sold in February unexpectedly rose last month, an industry trade organization said Monday, rebounding from it’s previous drop and proving the nation’s economists wrong. According to the National Association of Realtors, the number of homes sold rose 5.1% to a seasonally-adjusted rate of 4.72 million units in February up from 4.49 million annualized units.

Economists were expecting home resales to slip to a 4.45 million-unit pace, from the 4.49 million rate initially reported for January, which was unrevised. February’s sales increase was the largest since July 2003.

The increased sale of homes is a welcome sign to Wall Street, too, as many believe that the housing market will eventually lead the nation’s economy out of this recession. The Dow surged massively nearly 500 points on March 23rd in response to President Obama’s announcement of toxic asset plan and the favorable housing report. Econimists, who were expecting existing home sales to fall to 4.45 million units, said the jump in sales was much better than what they had predicted.

As it has been for the past couple months, existing home sales were stronger in the West than the rest of the nation — primarily in the struggling housing market of California. Existing home sales in the region were up 2.6% from a month ago to 1.2 million annualized units, and are up 30.4% from a year ago.  Nevada even saw an increase in homes sales especially in the Las Vegas area.

In the Northeast, sales rose 15.6% to an annualized rate of 740,000 units and are down 14.9% from a year ago. In the Midwest, sales were basically flat — up 1% — to 1.04 million units.

In the struggling Southern market, existing home sales rose 6.1% to an annualized rate of 1.74 million units, according to the trade organization.

Real Estate Industry US Home Sales