Sales of existing homes have now improved for three consecutive months according to the latest data from the National Association of Realtors (NAR). Their figures show sales increased by 3.6 percent in December compared to December 2010.
Their figures are based on completed transactions for co-op’s, condominiums, townhomes and single family homes. Lawrence Yun, chief economist for the NAR, is hopeful these figures may finally show a sustained recovery. He thinks a combination of low interest rates, low property prices and better employment figures is increasing consumer confidence. Sales of existing homes for the entire year increased by 1.7 percent compared to 2010.
Meanwhile Moe Veissi, NAR president, points out that most Americans still want to own their own home, and there is huge pent-up demand, with household formation set to return to normal levels as the job market continues to improve. She also says that new buyers help stimulate the overall economy due to the increased demand for goods and services.
By the end of December housing inventory levels fell by 9.2 percent, which represents a 6.2 month supply, compared to a 7.2 month supply in November. Inventory levels are now at their lowest level since March 2005; we could see many markets begin to stabilise, and some could even see modest price increases, according to Yun.
Investors accounted for 21 percent of home purchases in December, while first-time buyers accounted for 31 percent of sales. Distressed homes accounted for 32 percent of sales in December, up from 29 percent in November. The national median price for existing homes was $164,500 in December, which is 2.5 percent less than December 2010.