Home supply rises 4.2%

According to data compiled by ZipRealty, inventory of homes -- single-family homes, condominiums and town houses listed on local multiple-listing services -- in 27 major metropolitan areas rose 4.2% in February from a month earlier.

The inventory in February dropped 19% year-over-year. The figures compiled by ZipRealty may not present the exact level of supply since half of foreclosed homes are not included on multiple-listing services at any given time on account of such homes awaiting repairs or being subject to litigation. Ivy Zelman, chief executive of Zelman Associates, a research firm, says the average increase in home inventory in February has been 3.4%, over the past 27 years.

Analysts say the housing inventory could be much higher than what is reported, and a large supply of unsold homes could hit market recovery. David Moon, president of Moon Capital Management, says the housing inventory data does not account for properties on which the loans are seriously del inquent and those that already are in the foreclosure process but not for sale. Banks often have houses in their real estate owned portfolios that aren't yet on the market.