Existing-home sales edged up in December 2013, sales for all of last year were the highest since 2006 and median prices maintained strong growth, according to the National Association of Realtors (NAR).
NAR says that total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1% to a seasonally adjusted annual rate of 4.87 million in December from a downwardly revised 4.82 million in November but are 0.6% below the 4.9-million-unit level in December 2012.
For all of last year, there were 5.09 million sales, which is 9.1% higher than 2012, NAR reports. It was the strongest performance since 2006, when sales reached 6.48 million at the close of the housing boom.
‘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,’ comments Lawrence Yun, NAR chief economist. ‘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.’
The national median existing-home price for all of last year was $197,100, NAR notes, which is 11.5% above the 2012 median of $176,800 and the strongest gain since 2005, when it rose 12.4%.
The median existing-home price for all housing types in December was $198,000, up 9.9% from December 2012, NAR adds. Distressed homes – foreclosures and short sales – accounted for 14% of December sales, unchanged from November. Distressed homes accounted for 24% of sales in December 2012. The shrinking share of distressed sales accounts for some of the price growth.
Ten percent of December sales were foreclosures, and 4% were short sales, according to NAR. Foreclosures sold for an average discount of 18% below market value in December, and short sales were discounted 13%.
Total housing inventory at the end of December fell 9.3% 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, NAR says. Unsold inventory is 1.6% above a year ago, when there was a 4.5-month supply.
The median time on market for all homes was 72 days in December, NAR reports, up sharply from 56 days in November but slightly below the 73 days on market in December 2012. Adverse weather reportedly delayed closings in many areas. Twenty-eight percent of homes sold in December were on the market for less than a month, down from 35% in November, which appears to be a weather impact.
Short sales were on the market for a median of 122 days in December, while foreclosures typically sold in 67 days and non-distressed homes took 70 days, NAR adds.
NAR reports that the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.46% in December from 4.26% in November. The rate was 3.35% in December 2012.
‘The only factors holding us back from a stronger recovery are the ongoing issues of restrictive mortgage credit and constrained inventory,’ says NAR President Steve Brown. ‘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.’
First-time buyers accounted for 27% of purchases in December, NAR notes, down from 28% in November and 30% in December 2012.
According to NAR, all-cash sales comprised 32% of transactions in December, unchanged from November; they were 29% in December 2012. Individual investors, who account for many cash sales, purchased 21% of homes in December, up from 19% in November but unchanged from December 2012.
Single-family home sales rose 1.9% to a seasonally adjusted annual rate of 4.3 million in December from 4.22 million in November but are 0.7% below the 4.33-million-unit pace in December 2012, NAR says. The median existing single-family home price was $197,900 in December, up 9.8% from a year ago.
NAR adds that existing condominium and co-op sales fell 5% to an annual rate of 570,000 units in December from 600,000 units in November and are unchanged from a year ago. The median existing condo price was $198,600 in December, which is 10.9% above December 2012.
Regionally, existing-home sales in the Northeast slipped 1.5% to an annual rate of 640,000 in December but are 3.2% higher than December 2012, NAR reports. The median price in the Northeast was $239,300, up 3.6% from a year ago.
NAR says existing-home sales in the Midwest fell 4.3% in December to a pace of 1.11 million and are 0.9% below a year ago. The median price in the Midwest was $150,700, which is 7% higher than December 2012.
In the South, existing-home sales increased 3% to an annual level of 2.03 million in December and are 4.6% above December 2012, NAR notes. The median price in the South was $173,200, up 8.9% from a year ago.
According to NAR, existing-home sales in the West rose 4.8% to a pace of 1.09 million in December but are 10.7% below a year ago. Inventory is tightest in the West, which is holding down sales in many markets, and multiple bidding is causing the region to experience the strongest price gains in the U.S. The median price in the West was $285,000, up 16% from December 2012.