Improving Conditions Lift Existing-Home Sales

Record-low interest rates, high affordability, pent-up demand and an improving labor market all contributed to December’s 12.8 percent year-over-year increase in existing-home sales, noted NAFCU Research Assistant Doug Christman.

The National Association of Realtors, which reported the data Tuesday, said existing-home sales in December came in at 4.94 million units on an annualized, seasonally adjusted basis. “That was 1 percent slower than November’s pace,” noted Christman, “but it still marked the second-highest monthly sales activity since November 2009.”

The inventory level for existing homes stood at 4.4 months of supply in December, down from a revised 4.8 percent from November. Christman noted that December’s months of supply figure was 31.3 percent lower than it was a year ago.

The median existing-home price rose from a revised $179,400 in November to $180,800 in December. That’s up from $162,200 a year ago, Christman noted. “A decline in distressed homes on the market is tightening inventories and helping to push the median existing home price upward,” he said.

Christman added that mortgage rates are expected to increase slightly in 2013, but overall existing home sales should “remain on a steady upward trend and help keep the slowly recovering economy on track.”

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