Just when it seemed that home sales were taking a breather, new data from the National Association of REALTORS® (NAR) says that home sales in 2013 were the highest since 2006, well before the housing meltdown.
For all of 2013, housing sales totaled 5.09 million units, which is 9.1 percent higher than in 2012.
Lawrence Yun, NAR chief economist, explained, “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.
Yun says some momentum was lost toward the end of 2013 from disappointing job growth and limited inventory, but the year ended close to normal given the size of the population.
The national median existing-home price for all of 2013 was $197,100, which is 11.5 percent above the 2012 median of $176,800. That's the strongest gain since 2005 when prices rose 12.4 percent.
One bright spot was the decline of distressed homes in the mix. Foreclosures and short sales were 14 percent of December 2013 sales, down from 24 percent the year before.
Total housing inventory at the end of December fell 9.3 percent to 1.86 million existing homes on the market, a 4.6-month supply at the current sales pace.
Homes took longer to sell in December from November, but less time than in 2012.
The NAR suggests that home buyers and sellers face a few challenges in 2014. Mortgage rates are expected to continue to rise, and lenders and borrowers face new mortgage rules, such as new Qualified Mortgage underwriting standards.
But there's still plenty of pent-up demand, with more young adults moving out of their parents' home and into their own homes. The key is job growth, says the NAR. Only the confidence that stems from job security can enable first time buyers to buy and move-up buyers to purchase their next homes.
Fortunately, a new report by the U.S. Conference of Mayors suggests that nearly all U.S. cities are forecast to see economic growth this year, including some cities that have not really recovered from the Great Recession.
