Data released last week by the National Association of Realtors showed existing home sales rose by one percent at a rate of 4.87 million in December, and total sales in 2013 reached the highest level since 2006.
Total existing home sales, which include single-family homes, condominiums, townhomes and co-ops increased in December but remained 0.6 percent below the 4.9 million level in December 2012.
In 2013, total sales rose 9.1 percent over 2012 to reach 5.1 million—the strongest performance since 2006, when sales reached 6.48 million and the end of the housing boom.
“Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” NAR Chief Economist Lawrence Yun said. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”
The national median price for existing homes for 2013 totaled $197,100—11.5 percent higher than the 2012 median of $176,800 and the strongest gain since 2005. The median existing home price in December rose 9.9 percent year-over-year to reach $198,000.
Distressed homes, which include foreclosures and short sales, accounted for 14 percent of all existing home sales in December. Ten percent of December sales were foreclosures, and four percent were short sales.
Total housing inventory at the end of 2013 declined 9.3 percent to 1.86 million units, a 4.6-month supply at the current sales pace. Unsold inventory remains 1.6 percent above 2012 levels.
NAR President Steve Brown said an improvement in the labor market in the coming year should encourage sales, despite rising home prices and interest rates.
“The only factors holding us back from a stronger recovery are the ongoing issues of restrictive mortgage credit and constrained inventory,” Brown said. “With strict new mortgage rules in place, we will be monitoring the lending environment to ensure that financially qualified buyers can access the credit they need to purchase a home.”