Pace of U.S. Existing Home Sales Rises 6.5% to 4.74 Million Units in December

By: •

The pace of sales for existing homes in the United States came in much better than market expectations in December, according to an industry survey released Monday.

Existing home sales rose to an annualized pace of 4.74 million units in December, marking a 6.5% month-over-month rise following November's downwardly revised sales pace of 4.45 million units, according to the National Association of Realtors (NAR).

"It appears some buyers are taking advantage of much lower home prices," said Lawrence Yun, NAR chief economist. "The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future."

Economists were expecting December's sales pace to fall to 4.40 million units. Over the year, the pace of sales has fallen by 3.5%.

The national median existing home price fell to $175,400 in December, down from the November figure of $180,300. Over the past year, prices have fallen 15.3%.

Single-family unit sales - which account for four-fifths of all sales - rose 7.0% to a pace of 4.26 million. That is up from a rate of 3.98 million in the previous month.

Total housing inventories fell to a 9.3-month supply in December from the unrevised 11.2-month overhang recorded in November.

Prior to the release, economists from Wachovia said existing home sales had been holding in a "relatively tight range over the past year or more, but finally broke to the downside in November." They noted in the last report that, "nearly half of all sales were foreclosure-related," and that a trend will be difficult to establish in early 2009 with so many distressed assets being sold.

Existing home sales, which include single-family homes, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the new home sales index, which is based on contracts or the acceptance of a deposit.

By Stephen Huebl and edited by Sarah Sussman
©CEP News Ltd. 2009