Home Sales

The National Association of Realtors just reported that home sales increased 5 percent in December to the best level since January 2011 and the third straight monthly increase.

Home sales for2011, totaled 4.26 million. That’s up from 4.19 million the previous year, but, below the 6 million that economists equate with healthy housing markets.

The median home sales price in December rose 2.3 percent to $164,500.

Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to another record low of 3.96 percent in December from 3.99 percent in November; the rate was 4.71 percent in December 2010; recordkeeping began in 1971.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”

Total housing inventory at the end of December dropped 9.2 percent to 2.38 million existing homes available for sale, which represents a 6.2-month supply(2) at the current sales pace, down from a 7.2-month supply in November.

Let’s hope home sales continue to improve in 2012.