U.S. existing-home sales and prices rose in December, according to the National Association of Realtors, pushing 2014 prices to their highest level in seven years.
Total sales of U.S. existing-homes increased 2.4 percent in December, to a seasonally adjusted annual rate of 5.04 million, up from 4.92 million in November. Compared with the previous year, sales were up 3.5 percent. For all of 2014 however, existing-home sales fell 3.1 percent.
“Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated,” said NAR chief economist Lawrence Yun. “Sales were measurably better in the second half – up 8 percent compared to the first six months of the year.”
The national median price for existing-homes rose to $209,500 in December, up from $207,200 in November and up 6.0 percent from the year before. For all of 2014 the median price was $208,500, a 5.8 percent from 20143 and the highest price since 2007 when it was $219,000.
The NAR defines existing homes as all previously-owned single-family homes, townhouses, condominiums, and co-ops. The group “seasonally adjusts” the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc. to smooth out the trends.
The NAR also describes its sales data based on an annual pace. The monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.
Sales Pace by Region
Sales fell in half the country and rose in the other half. The Northeast saw its existing-sales pace drop 2.9 percent to an annual rate of 660,000, down from 680,000 in November. Compared with the previous year, sales were 3.1 percent higher though.
In the Midwest, sales declined 3.5 percent to an annual pace of 1.09 million in December, down from 1.13 million the month and down 2.7 percent from December 2013.
Sales in the South rose 3.8 percent to an annual level of 2.17 million, up from 2.09 million in November and up 7.4 percent from a year earlier.
A major jump in sales in the West boosted the national average, with sales leaping 9.8 percent in December to an annual rate of 1.12 million, up from 1.02 million and up 2.8 percent from the year before.
Sales Price by Region
Home prices rose where sales rose and fell in the regions where they decreased. In the Northeast, the median existing-home price declined to $246,600 in December from $247,000. The price is still 3.2 percent higher than the previous year.
The price in the Midwest dropped to $159,100 from November’s $160,800. Compared with the year before, the price was up 5.3 percent.
In the South, the median price rose to $184,100 in December, up from $178,100 and up 6.6 percent from December 2013.
The median price in the West climbed to $299,600 from $295,300 in November and up 5.6 percent from a year ago.
The number of homes on the market tanked in December, falling 11.1 percent to 1.85 million existing homes, a 4.4-month supply at the current sales rate. That was down from a 5.1-month supply in November. Inventory was down 0.5 percent from December 2013.Realtors consider the market to be balanced between supply and demand when there is a 6-month supply of homes for sale.
Data for January existing home sales, prices, and inventory will be available at the end of February.