Existing Home Sales Slip in December, But Housing Remains Strong
December existing homes sales slowed by 1% from November to a seasonally adjusted annual rate of 4.94 million, according to the National Association of Realtors (NAR). But sales are were up 12.8% in December from 2011, and the total number of sales in 2012 rose to the highest level in five years.
The annual price for existing homes also jumped to the highest level since 2005. The median price for all existing housing types was $180,800 in December. That's 11.5% more than the same period in 2011.
To help make sense of the numbers, Barry Habib, VP and chief market strategist at Residential Finance Corporation, joined The Daily Ticker's Lauren Lyster in the accompanying interview.
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"I see some very bright spots here," he says. "A 11% rise in the median home price year-over-year is very strong and we've seen this consistently throughout 2012 and it looks like we have a lot of strength going into 2013, especially highlighted by the levels of inventory."
To his point, total housing inventory in December fell by 8.5% to 1.82 million existing homes for sale, according to NAR, or the lowest level of housing supply since May 2005.
"If there are fewer homes on the market and more people who want to purchase them, especially at these rates ... it pushes home prices higher," says Habib who is also the founder and CEO of MBS Highway, which was created to help interpret and forecast activity in the mortgage rate and bond markets.
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He believes home prices and demand will remain strong as we head into 2013.
While the markets hit hardest during the housing crash will likely rebound the most, Habib forecasts at least a 5% rise in home prices across the board.
"The housing market does look strong, at least for the next three or four years," he says.
Tell Us What You Think
Do you agree that the housing market will continue to gain strength this year?
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