While December’s existing-home sales increased slightly compared with November nationwide, sales for all of 2013 were the highest since 2006, according to the National Association of Realtors®.
Total existing-home sales, which include completed transactions for single-family homes, townhomes, condominiums and co-ops, increased 1 percent to a seasonally adjusted annual rate of 4.87 million in December from a downwardly revised 4.82 million in November. However, they were 0.6 percent below the 4.90 million-unit level in December 2012.
In 2013, 5.09 million existing homes sold nationwide – a 9.1 percent increase compared with 2012. It was the strongest performance since 2006, when sales reached an unsustainably high 6.48 million at the close of the housing boom, the NAR reports.
Lawrence Yun, NAR chief economist, says housing has experienced a healthy recovery over the past two years.
“Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” he says. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”
Median prices continued to show improvement, as well, with the national median existing-home price for all of 2013 coming in at $197,100. That’s 11.5 percent above the 2012 median of $176,800, and was the strongest gain since 2005 when it rose 12.4 percent, according to the NAR.
The median existing-home price for all housing types in December was $198,000, up 9.9 percent from December 2012.
A shortage of inventory continues to plague the nation, with total housing inventory at the end of December falling 9.3 percent to 1.86 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace, down from 5.1 months in November. Unsold inventory is 1.6 percent above a year ago, when a 4.5-month supply was available.
Existing-home sales in the West rose 4.8 percent to a pace of 1.09 million in December, but are 10.7 percent below a year ago. Inventory is tightest in the West, which is holding down sales in many markets, and multiple bidding is causing it to experience the strongest price gains in the U.S. The median price in the West was $285,000, up 16.0 percent from December 2012.
NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, says that with jobs expected to improve this year, sales should hold even despite rising home prices and higher mortgage interest rates.
“The only factors holding us back from a stronger recovery are the ongoing issues of restrictive mortgage credit and constrained inventory,” he says. “With strict new mortgage rules in place, we will be monitoring the lending environment to ensure that financially qualified buyers can access the credit they need to purchase a home.”
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