Expectations for higher home prices and overall housing market improvements for 2013 are fueled by positive reports seen throughout the second half of 2012. The National Association of Realtors' fourth quarter home price report posted sizable gains on a year-over-year basis, with more metropolitans posting higher median sales prices.
According to the report, the median existing single-family home price was up in 133 of the 152 metropolitans areas covered by the organization. With 120 cities posting gains on an annual, a widespread recovery is more evident when compared to the 29 metros that were considered up in the final quarter of 2011.
With a lower inventory of foreclosures, home prices have posted significant improvements in recent months. When looking at foreclosures and short sales, these properties only accounted for 23 percent of transactions, down from 30 percent recorded in the fourth quarter the year before.
Total existing-home sales rose 5 percent from the third quarter of 2012 and were a notable 12.1 percent higher than seen in the fourth quarter of 2011, marking the highest level seen in the final quarter since 2009.
Home sales in the South increased 5 percent in the last three months of 2012 and jumped 13.2 percent higher than sales in the fourth quarter of 2011. When comparing home prices, Q4 of 2012 posted a 9.1 percent gain from the same quarter a year earlier. The West also posted improvements to home prices, which were up 20.1 percent in the fourth quarter on a year-over-year basis. Existing home sales also increased 5.9 percent on a quarterly measurement and 5 percent when compared to a year ago.
Sales of existing homes in the Northeast were up 2.2 percent in the fourth quarter of 2012, and were 12.9 percent above sales in the fourth quarter of 2011. However, the median home price only posted a 0.7 percent improvement, but the $228,400 is above the national median.
In the Midwest, existing-home sales increased 5.6 percent on a quarter-over-quarter basis and were 18.3 percent higher than the fourth quarter of the previous year. The median existing single-family home price also went up 9.2 percent, bringing the median price to $143,800 .
"The housing affordability index shows that the national median income of families was almost double the income needed to buy a median-priced home in 2012, so most buyers are able to stay well within their means," said Lawrence Yun, chief economist of NAR. "Even with rising home prices, conditions are expected to stay very favorable with the index averaging 161 in 2013, which would be the third best on record."