Existing home sales inched up in February, improving for the first time in seven months, according to the National Association of Realtors.

Sales of single-family homes, townhouses, condominiums and co-ops increased by 2.9 percent last month to a seasonally adjusted annual rate of 5.03 million units, the Washington-based trade group reported. Despite the upturn, sales remained 2.38 percent below last year.

Driven down by weaker sales of luxury homes, the median price for existing homes of all types last month was $195,900, a decline of 8.2 percent in the past two years.

"We're not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing," NAR Chief Economist Lawrence Yun said in a statement.

Yun said higher loan limits for mortgages should unleash pent-up demand from buyers later this year, boosting prices as housing inventories are drawn down.