Friday, January 23, 2015

Existing Home Sales Rebound Despite Low Inventory

Existing home sales rose 2.4% in December to a seasonally adjusted annual rate of 5.04 million. Sales of existing homes rose above 5 million for the sixth time this year. Exisitng home sales in November was downwardly revised to a seasonally adjusted annual rate 4.92 million. For the full year 2014, there were 4.93 million sales.

The median existing-home price increased 6.0% year-over-year to $209,500 in December, marking the 34th consecutive month of year-over-year price gains. Median home prices for 2014 rose to their highest level since 2007, although total sales fell 3.1% during the year.

Total housing inventory fell 11.1% in December to 1.85 million homes available for sale, and declined 0.5% from December 2013. There is currently a 4.4-month supply of total existing homes available for sale, down from 5.1 months in November.

Existing home sales weakened in two of the four regions, posting month-over-month declines of 3.5% in the Midwest and 2.9% in the Northeast, but increasing 9.8% in the West and 3.8% in the South.

NAR Chief Economist Lawrence Yun noted: “A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub-4% interest rates. Housing costs — both rents and home prices — continue to outpace wages and are burdensome for potential buyers trying to save for a downpayment while looking for available homes in their price range.”

All-cash sales were 26% of transactions in December, one percentage point higher than in November yet 6 percentage points lower than December 2013.

First-time home buyers represent 29% of all buyers, down from 31% in November.

Read the NAR report.

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