Us property sales rebound in december

Photo credit: Cyndie

Total existing-home sales rose 2.4 per cent at the end of 2015, according to the National Association of Realtors. Transactions climbed to a seasonally adjusted annual rate of 5.04 million - the sixth time in seven months that sales have been above an annual pace of 5 million.

Indeed, December sales were higher by 3.5 per cent and are now above year-over-year levels for the third consecutive month.

Nonetheless, the overall year saw sales dip slightly from the previous year, as the market moderated following booming growth. Across all of 2014, there were 4.93 million sales, a 3.1 per cent decline from 2013 (5.09 million).

Lawrence Yun, NAR chief economist, says sales picked up in the second half of the year after a sluggish start: "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 percent compared to the first six months of the year."

Total housing inventory at the end of December dropped 11.1 per cent to 1.85 million existing homes available for sale, which, coupled with demand, drove the  median existing-home price in December up 6 per cent year-on-year to $209,500.

This marks the 34th consecutive month of year-over-year price gains. Indeed, the national median existing-home price was $208,500 in 2014, the highest since 2007 ($219,000) and 5.8 per cent higher than 2013.

"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," adds Yun.

The percent share of first-time buyers was 29 per cent in December, down from 31 percent in November but up from a year ago (27 per cent).

Mortgage rates, though, remain at affordable lows, with Freddie Mac reporting that the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 3.86 per cent in December, its lowest level since May 2013.

The Federal Housing Administration is also lowering annual mortgage insurance premiums as of this week, which the NAR forecasts will support first-time buyers.

NAR President Chris Polychron says the move to lower premiums will "enable more buyers to enter the market while continuing to protect taxpayers from the risky lending practices that led to the housing crash".