Existing Home Sales Fell In Dec.
Sales of existing homes eased in December but are well above where they were at the end of 2011, with low mortgage rates helping boost demand, the National Association of Realtors (NAR) said today.
Existing-home sales, or completed transactions, declined 1 percent to a seasonally adjusted annual rate of 4.94 million in December, down from 4.99 million in November, but well below analysts' expectations of 5.1 million.
Over all of 2012, however, the story is different. The Realtors group said total sales were the highest in five years, while the average annual sale price marked its highest gain since 2005.
Lawrence Yun, the association's chief economist, said pent-up demand is sustaining the market. "Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales," he said. "The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices."
The national median price for an existing home for all housing types was $180,800 in December, which is 11.5 percent higher than in December 2011, the group said. This marked the 10th consecutive month of year-over-year price gains, which last occurred from August 2005 to May 2006, and is the strongest increase since November 2005, when the median jumped 12.9 percent.
Yun predicted increases in sales and prices this year, especially with an expected increase in the number of jobs. Meanwhile, NAR President Gary Thomas said homes should remain affordable, although he predicts a gradual rise in mortgage rates throughout 2013, but not higher than 4 percent through June.
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