Existing-home sales bounced back in December and climbed above an annual pace of 5 million sales for the sixth time in seven months, according to the National Association of REALTORS®. Median home prices for 2014 rose to their highest level since 2007, but total sales fell 3.1 percent from 2013.
NAR chief economist Lawrence Yun says 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,” he
says. “Sales were measurably better in the second half – up 8 percent compared
to the first six months of the year.”
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. Unsold inventory is now 0.5 percent lower than a year ago (1.86 million).
The percent share of first-time buyers was 29 percent in December, down from 31 percent in November but up from 27 percent a year ago. First-time buyers in 2014 represented an average of 29 percent for the second straight year. A separate NAR survey released in late 2014 revealed that the annual share of first-time buyers fell to its lowest level in nearly three decades.
There is optimism that the Federal Housing Administration’s plan to reduce annual mortgage insurance premiums will have a positive impact on first-time buyers once it goes into effect on January 26.
December existing-home sales in the Northeast declined 2.9 percent to an annual rate of 660,000, but are 3.1 percent above a year ago. The median price in the Northeast was $246,600, which is 3.2 percent above a year ago.
In the Midwest, existing-home sales fell 3.5 percent to an annual level of 1.09 million in December, and are now 2.7 percent below December 2013. The median price in the Midwest was $159,100, up 5.3 percent from a year ago.
Existing-home sales in the South climbed 3.8 percent to an annual rate of 2.17 million in December, and are 7.4 percent above December 2013. The median price in the South was $184,100, up 6.6 percent from a year ago.
Existing-home sales in the West jumped 9.8 percent to an annual rate of 1.12 million in December, and are 2.8 percent above a year ago. The median price in the West was $299,600, which is 5.6 percent above December 2013.