Existing-Home Sales Slip a bit in December, but Prices Continue to Rise

Existing-home sales eased a bit in December, but are still well above a year ago, while a limited inventory of homes for sale maintained the upward trend in home prices. The total sales in 2012 were the highest they been in five years, while the annual price rose the most since 2005.

Total existing-home sales, which are completed transactions that include single-family homes and townhomes, etc., declined one percent.

NAR’s chief economist said pent-up demand is yet sustaining the market. “Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales,” he said. “The number of potential buyers who stayed on the sidelines accumulated during the recession period, but many are starting to enter the market as their financial ability and confidence grows, along with home prices.

Probable improved job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record low 3.35 percent in December.

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