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Existing home sales in the United States bounced back in December and climbed above an annual pace of five million sales for the sixth time in seven months, according to the latest index figures. Meanwhile, median home prices for 2014 rose to $208,500, their highest level since 2007 and 5.8% higher than 2013, the data from the National Association of Realtors shows. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 2.4%. Compared to December 2013 sales were up 3.5% and are now above year-over-year levels for the third straight month. Lawrence Yun, NAR chief economist, 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. Sales were measurably better in the second half, up 8% compared to the first six months of the year,’ he added. Total housing inventory at the end of December dropped 11.1% 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% lower than a year ago when it was 1.86 million. ‘A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub 4% interest rates,’ explained Yun. ‘Housing costs, both rents and home prices, continue to outpace wages and are burdensome for potential buyers trying to save for a down payment while looking for available homes in their price range,’ he pointed out. The data also shows that the share of first time buyers was 29% percent in December, down from 31% in November but up from a year ago when it was 27%. First time buyers in 2014 represented an average of 29% for the second straight year. All cash sales were 26% of transactions in December, up from 25% in November and 32% in December 2013. Individual investors, who account for many cash sales, purchased 17% of homes in December, up 2% from the previous month but down 4% from December 2013. Some 63% of investors paid cash in December 2014. Distressed sales, foreclosures and short sales were up slightly in December at 11% compared with 9% in November but were down from 14% in December 2013. Some 8% were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 15% below market value in December compared with 17% in November, while short sales were discounted 12% compared to 13% in November. Properties typically stayed on the market the same amount of time in December at 66 days as November but for a slightly… Continue reading →
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