Existing home sales increased at the fastest rate in nearly six years last month, according to data released by the National Association of Realtors (NAR). In February, sales of previously owned homes increased by 5.1 percent to an annual rate of 4.72 million units, the largest gain since July 2003, Reuters reported.

“Lower prices coupled with very low interest rates and an $8,000 tax credit are causing first-time home buyers to dive in,” said Bill Emerson, CEO of Quicken Loans in Livonia, Mich.

However, nearly half of the sales were on foreclosed homes or short-sale transactions, and homeowners are getting much less money when putting their houses on the market. According to NAR data, the median national home price declined 15.5 percent during the past year to $165,400, the second-biggest drop on record.

“Our analysis shows that distressed homes typically are selling for 20 percent less than normal market price, and this naturally is drawing down the median price,” said Lawrence Yun, NAR’s chief economist.

Additionally, the inventory of previously owned homes that are on the market increased 5.2 percent to 3.8 million. In January, 3.61 million homes were on the market.

“While it’s good to see sales go up, it’s more important to see inventories go down,” Emerson said. “When that happens, only then can you start to talk about a housing correction.”

To read about Greater Des Moines’ housing market, click here.