December Existing-Home Sales Rise 1 Percent

(Los Angeles Times/MCT) -

Existing-home sales in December rose 1 percent from the previous month, to an annual rate of 4.87 million, the National Association of Realtors said Thursday.

The organization also reported that for all of 2013, there were 5.09 million completed transactions for existing homes, 9.1 percent higher than 2012 and the strongest performance since the housing boom in 2006.

“Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” said Lawrence Yun, chief economist at the National Association of Realtors. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal, given the size of our population.”

November’s existing-home sales were revised slightly, to an annual rate of 4.82 million, down from the originally reported figure of 4.9 million.

The association also reported that the median existing-home price for all housing types last month was $198,000, up nearly 10 percent from December 2012. A shrinking rate of distressed-home sales – down to 14 percent of all sales last month from 24 percent a year before – has driven some of the price growth, the group said.

Though 2013 ended better than expected, one analyst warns that sales might face some headwinds.

“Rising trends in mortgage rates we expect this year will keep sales under pressure and will, in time, bring the rebound in home prices to a halt,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note to clients. “With inventory still tight, median single-family home prices rose 9.8 percent (year-over-year) in (December), but the rate of increase is slowing.”