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Existing Home Sales: On the Rise

February 21, 2012

Home Sales Pace

Sales of existing U.S. homes rose for the third consecutive month in December, according to the National Association of Realtors, a possible sign of a “sustained recovery.”

“The pattern of home sales in recent months demonstrates a market in recovery,” said NAR chief economist Lawrence Yun. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

Total existing home sales grew 5.0 percent in December to a seasonally adjusted annual rate of 4.61 million units from a downwardly revised 4.39 million in November. Compared with one year earlier, sales were up 3.6 percent.

The national median home price rose on a monthly basis for the second month, rising to $164,500 from a downwardly revised $164,000 in November. The median price is still down 2.5 percent from December 2010.

The NAR defines existing homes as all previously-owned single-family homes, townhouses, condominiums, and co-ops. The group “seasonally adjusts” the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc to smooth out the trends.

The NAR also describes its sales data based on an annual pace. The monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.

Sales Pace by Region

Regionally, sales rose all across the country, led by another major increase in the Northeast.

In the Northeast, sales jumped 10.7 percent to an annual rate of 620,000 in December from 560,000 homes in November. Sales are up 3.3 percent compared with November 2010.

Sales in the Midwest increased 8.3 percent to an annual pace of 1.04 million homes from 960,000 the month before and up 9.5 percent from the previous year.

In the South, sales rose 2.9 percent to an annual level of 1.76 million units from November’s 1.71 million homes. On a yearly basis, sales have risen 3.5 percent.

In the West, sales moved up 2.6 percent to an annual pace of 1.19 million in December from 1.16 million. Compared with the year before, sales were down 0.8 percent.

Home Prices

The median home price, the point at which half of all homes are sold for more and half are sold for less, rose in the West and South, but fell in the Northeast and Midwest.

In the Northeast, the median price fell to $231,300 from $237,300 in November, and was down 2.7 percent from the previous year.

The median price in the Midwest declined to $129,100 in December from $132,400, and fell 7.9 percent the year before.

In the South, home prices rose to a median of $146,900 from November’s $142,200 but decreased 1.1 from last year.

In the West, the median price grew to $205,200 in December from $200,600 and increased 0.3 percent from December 2010.

Inventory

Total existing-home inventory fell 9.2 percent in December to 2.38 million homes for sale. At the current sales rate, that represents a 6.2-month supply, down from an 7.2-month supply in November.

 

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