Home Sales Rebound In December

Despite low inventory conditions, home sales bounced back in December and climbed above an annual pace of 5 million sales for the sixth time in seven months. Median home prices for 2014 rose to their highest level since 2007, but total sales fell 3.1% from 2013.

 
Summary
Existing Home Sales
New Home Sales
Existing Home Prices
New Home Prices

Total existing home sales rose 2.4% to a seasonally adjusted annual rate of 5.04 million in December from a downwardly-revised 4.92 million in November. From a year ago, December sales were higher by 3.5% and are now above year-over-year levels for the third straight month. For all of 2014, there were 4.93 million sales, a 3.1% decline from 2013. The national median existing-home price was $208,500, the highest since 2007 and a 5.8 percent increase from 2013.

Sales picked up in December to close a 2014 that got off to a sluggish start but showed encouraging signs of activity the second half of the year. Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated. Sales were measurably better in the second half – up 8% compared to the first six months of the year.

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. 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.

The median existing home price for all housing types in December was $210,200 which is 6.32% above December 2013. This marks the 34th consecutive month of year-over-year price gains. The median new home price for all housing types in December was $298,100 which is 8.82% above December 2013.

December existing-home sales in the Northeast declined 2.9% to an annual rate of 660,000 but are 3.1% above a year ago. The median price in the Northeast was $246,600 which is 3.2% above a year ago. In the Midwest, existing-home sales fell -3.5% to an annual level of 1.09 million in December, and are now -2.7% below December 2013. The median price in the Midwest was $159,100 up 5.3% from a year ago.

Existing-home sales in the South climbed 3.8% to an annual rate of 2.17 million in December, and are 7.4% above December 2013. The median price in the South was $184,100, up 6.6% from a year ago. Existing-home sales in the West jumped 9.8% to an annual rate of 1.12 million in December, and are 2.8% above a year ago. The median price in the West was $299,600, which is 5.6% above December 2013.

 

Housing Starts End Year SolidlyHousing starts rose 4.4% in December from a month earlier to an annual rate of 1.089 million. Starts on single-family homes, which exclude apartments and reflect the bulk of the market, rose to a rate of 728,000, the highest level since March 2008.Housing Starts End Year SolidlyBuilding permits for single-family homes climbed to their highest levels since September 2012. Permits for all private housing, however, fell amid a decline in demand for apartment construction. Permits are a bellwether for construction activity in coming months.&enbsp;» [read more]

 

Housing Inventory Drops Dramatically In DecemberTotal housing inventory at the end of December dropped 11.1% 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. Unsold inventory is now 0.5% lower than a year ago.Housing Inventory Drops Dramatically In DecemberThe percent share of first-time buyers was 29% in December, down from 31% but up 2% from a year ago. First-time buyers in 2014 represented an average of 29% for the second straight year. A separate released in late 2014 revealed that the annual share of first-time buyers fell to its lowest level in nearly three decades. » [read more]

 

Mixed Signals For Spring Housing SeasonThe spring housing market is still about a month away, but industry experts are already arguing its outcome. New reports offer very different views on both head winds and tail winds. Overall economic conditions, everything from job growth to cheap gas, could help home sales. But still high home prices, tight credit conditions and low supply all stand in the way.
Mixed Signals For Spring Housing SeasonThe numbers may be influenced by better news in the mortgage market. Not only are interest rates near record lows, but the FHA, the government insurer of home loans, lowered its annual premiums by half a percentage point, which it estimates saves the average borrower about $900 a year. While the amount isn't a lot, just the attention surrounding the announcement may have been enough to get potential buyers out for a look. » [read more]

 

Home Sales Slightly Momentum As Investor Activity DeclinesAfter four consecutive months of gains, existing home sales slipped in August as investors paying in cash retreated from the market. Sales increases in the Northeast and Midwest were outweighed by declines in the South and West.Summary Total existing-home sales decreased 1.8% to a seasonally adjusted annual rate of 5.05 million in August from a slight downwardly-revised 5.14 million. Sales are at the second-highest pace of 2014, but remain 5.3% below the 5.33 million-unit level from last August, which was also the second-highest sales level of 2013. Sales activity remains stronger than earlier in the year, but fell last month as investors stepped away. "here was a marked decline in all-cash sales from investors. » [read more]