As overall housing market results continue to be issued for 2012, the National Association of Realtor said home prices increased in December, while sales fell from the previous month.
Data from the NAR revealed that sales fell 1 percent from November, however transactions for all housing types increased 12.8 percent from December 2011. This month-over-month slip brought the seasonally adjusted annual rate to 4.94 million, while the preliminary sales should be around 4.65 million. This is up 9.2 percent from the overall rate seen the year before.
Despite the drop in sales during the last month of the year, increased activity has helped eliminate a large amount of a build up of inventory. According to the report, total housing inventory was down 8.5 percent for the end December, leaving 1.82 million existing homes for sale on the market. This brought the supply down to 4.4 months. In November, the pace was 4.8 months, while December represents the lowest inventory in over a decade.
With less homes for sale on the market, some prospective buyers may think they have less to choose from, however, home sales have increased a notable amount as much of the built up inventory was delinquent properties that prevented prices from recovering. NAR noted the national median existing-home price was $180,800 in December, up 11.5 percent from the same time a year earlier.
Sales and price gains vary regionally, low mortgage rates to help sales
In the South, existing-home sales fell 3 percent but were 14.7 percent higher than December 2011 and the median price of $161,100 was lower than the national median, but was 11 percent higher than a year ago. Sales were also down in the Midwest, but the median price rose 12.3 percent above the December 2011 level.
Existing home sales jumped 5.1 percent in the West, an 8.8 percent increase, while the median home price of $239,900 surpassed the national median by far, and was 17.3 percent above the median from a year before. The Northeast also saw a gain in sales, which were up 3.2 percent, and the price moved 5.3 percent, bringing the median to $231,600.
Expectations for low mortgage rates throughout 2013 should also boost sales in coming months, which will contribute to the overall economic recovery and housing market stabilization.
"Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales," said Lawrence Yun, chief economist of NAR. "The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices."