December existing home sales rose by 1% to a seasonally adjusted yearly rate of 4.87 million, says the National Association of Realtors (NAR).
Sales for the whole of 2013 beat all records since 2006 when sales reached 6.48 million during the housing boom.
Sales for the whole of 2013 were 9% higher than in 2012. November sales were revised downward to 4.82 million.
NAR Chief Economist Lawrence Yun said that over the last 24 months housing has experienced a healthy recovery.
Yun said:
“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.”
“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.”
House prices rose in 2013
The median existing home price in the US increased by 11.5% in 2013 compared to 2012, rising from $176,800 to $197,100, the greatest gain since 2005’s 12.4% rise.
The average price for all housing types in December 2013 was 9.9% higher at $198,000, compared to the same month in 2012.
Short sales and foreclosures (distressed homes) made up 14% of December sales, the same figure as in November, but below 24% reported in December 2012. The NAR says that price growth is the main reason for the shrinking share of distressed sales.
Distressed sales for December 2013 were broken down as follows:
- Foreclosures 10%. Houses sold for 18% average below market value.
- Short sales 4. House went for 13% below market value.
December existing homes inventory
There were 1.86 million existing homes available for sale in December 2013, a fall of 9.3%. This represents a 4-to-6 supply at the current pace of sales, compared to 5.1 months in November. In 2012 there was a 4.5-month supply.
The average time all homes had been on the market in December was 72 days, a steep increase compared to November’s 56 days, but less than 73 days in December 2012. Closings were postponed in many areas because of the bad weather.
Twenty-eight percent of houses sold in December had been on the market for one month or less, versus 35% in November, “which appears to be a weather impact,” says NAR.
In December 2013, foreclosures typically sold within 67 days, short sales 122 days, while non-distressed homes took 70 days.
The national average commitment rate for a 30-year, fixed-rate, conventional mortgage increased to 4.46% in December 2013, from 4.26 the month before and 3.35 in December 2012.
Existing home sales should hold up in 2014
NAR President Steve Brown believes sales this year should hold, despite rising prices and higher mortgage interest rates.
Brown said:
“The only factors holding us back from a stronger recovery are the ongoing issues of restrictive mortgage credit and constrained inventory”
“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.”
Below are some highlighted data published by NAR today:
- 27% of home purchases were by first-time buyers in December, compared to 28% in November and 30% a year ago.
- 32% of all December transactions were all-cash sales, the same percentage as in November, but higher than December 2012’s twenty-nine percent.
- Sales of single-family homes increased by 1.9% in December to a seasonally adjusted yearly rate of 4.30 million, up from November’s 4.22 million, but 0.7% less than 4.33 million in December 2012.
- Existing home sales in the Northeast fell 1.5% in December, also declined in the Midwest (-4.3%), increased in the South by 3%, and rose by 4.8% in the West.