Existing home sales bounced back in December

Sales of previously owned homes bounced back in December and cleared a 5 million annual pace for the sixth time in the past seven months. 

Existing-home sales, which are completed transactions that include single-family homes and condos, rose 2.4 percent to a seasonally adjusted annual rate of 5.04 million last month, up from 4.92 million in November, the National Association of Realtors said Friday.

{mosads}”Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated,” said Lawrence Yun, NAR chief economist.

“Sales were measurably better in the second half — up 8 percent compared with the first six months of the year.”

From a year ago, December sales were 3.5 percent higher.

Sales hit 4.93 million last year, down 3.1 percent from the 5.09 million 2013.

Median home prices last year rose to their highest level since 2007 to $208,500, a 5.8 percent increase from 2013 ($197,100).

Total housing inventory at the end of December dropped 11.1 percent to 1.85 million existing homes available for sale, which represents a 4.4-month supply at the current sales pace — down from 5.1 months in November.  

“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 percent interest rates,” Yun said.

“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,” he said.

The share of first-time buyers was 29 percent in December, down from 31 percent in November but up from a year ago when it was 27 percent.

All-cash sales were 26 percent of transactions in December, up from 25 percent in November and 32 percent in December of last year. 

Single-family home sales increased 3.5 percent to a seasonally adjusted annual rate of 4.47 million in December from 4.32 million in November, and are 4 percent above the 4.3 million pace a year ago.

The average commitment rate for a 30-year, conventional, fixed-rate mortgage in December fell to 3.86 percent, its lowest level since May 2013 (3.54 percent), and down from 4 percent in November. The average annual rate was 4.17 percent in 2014.

Distressed sales — foreclosures and short sales — were up slightly in December (11 percent) from November (9 percent) but are down from 14 percent a year ago.

Regionally, existing-home sales in the Northeast fell 2.9 percent and 3.5 percent in the Midwest. Sales rose 3.8 percent in the the South and 9.8 percent in the West.