Sales of both new and existing U.S. homes declined in December, according to recent reports, but compared with the past year the housing market is definitely improving.
Total existing home sales slipped 1.0 percent in last month, according to the National Association of Realtors, down to a seasonally adjusted annual rate of 4.94 million homes from 4.99 million in November. Still, compared with December 2011, sales are up 12.8 percent.
The median price for existing homes was virtually unchanged at $180,800, an inch higher than November’s $180,600, but the new price was up 11.5 percent from the previous year. Plus prices have not grown this much on a yearly basis since the middle of the housing boom in November 2005.
Meanwhile, sales of new homes dropped 7.3 percent in December, according to the Commerce Department, to a seasonally adjusted annual rate of 369,000, down from 398,000 in November, for all of 2012, new home sales rose 20 percent, the largest gain since 2009. There is still a large gap to close, however. Economists consider 700,000 in annual sales to be a healthy level.
Existing home sales also posted positive numbers for 2012. Total sales rose to 4.65 million, a 9.2 percent increase from 2011 and the biggest total since 2007 and largest increase since 2004.
“Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales,” said NAR chief economist Lawrence Yun in a press release. “The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices. Likely job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013.”