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Business Title: Sales of Existing U.S. Homes Increased 5% to 4.61 Million Pace in December Sales (ETSLTOTL) of previously owned U.S. homes rose for a third month in December to the highest level since January 2011, a sign the housing market ended last year with momentum. Purchases (ETSLTOTL) increased 5 percent to a 4.61 million annual rate, the National Association of Realtors said today in Washington. The pace was less than the 4.65 million median forecast of economists surveyed by Bloomberg News. The gain helped push down the inventory of homes for sale last month to the lowest level since 2005. Purchases in 2011 climbed 1.7 percent from a year earlier as prices fell. Historically low mortgage rates and a pickup in employment may be giving Americans the confidence to purchase homes that have fallen in value. At the same time, another wave of foreclosures may inhibit a faster recovery in real estate as more distressed properties are put on the market. “We’re starting to see improvement in some of the key leading housing indicators,” Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York, said before the report. “First you have to see a recovery in the economy, then consumers have to register improving economic conditions, which seems to be happening already, and then they have to go and start looking for homes.” Economists’ sales estimates ranged from 4 million to 5 million following November’s previously reported 4.42 million pace. Last month, the group revised down housing figures going back to 2007 by an average 14 percent, showing that the industry that helped spark the 18-month recession was a bigger drag on the U.S. economy than previously estimated. Existing-home sales, tabulated when a contract closes, rose 1.4 percent from the same month last year. Total sales in 2011 were 4.26 million, compared with a peak of 7.1 million in 2005 during the housing boom. In 2008, sales totaled 4.1 million, the least since 1995. The number of previously owned homes on the market dropped 9.2 percent to 2.38 million. At the current sales pace, it would take 6.2 months to sell those houses, down from 7.2 months at the end of November. A range of seven months to eight months supply is consistent with stable home prices, the group has said. The median price of a previously-owned home declined 2.5 percent to $164,500 from $168,800 in December 2010, today’s report showed. “December was a nice finish to a tough year in 2011,” Lawrence Yun, the group’s chief economist, said in a news conference today as the figures were released. “If that can be sustained, we are talking about a genuine recovery in 2012.” Sales of existing single-family homes increased 4.6 percent to an annual rate of 4.11 million. Purchases of multifamily properties, including condominiums and townhouses, climbed 8.7 percent to a 500,000 pace. Purchases rose in all four regions, led by a 10.7 percent gain in the Northeast and an 8.3 percent increase in the Midwest. Contract cancelations were reported by 33 percent of the group’s members in December, unchanged from a month earlier. Of all purchases, cash transactions accounted for about 31 percent, up from 28 percent in November. Distressed sales, comprised of foreclosures and short sales in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for 32 percent of the total in December, up from 29 percent a month earlier. Investors accounted for 21 percent of purchases last month, an increase from 19 percent in November. Homebuilders are growing more optimistic the housing market is recovering. The National Association of Home Builders/Wells Fargo sentiment index rose this month to the highest level since June 2007 as sales and buyer traffic improved. The economy added 200,000 jobs in December and the unemployment rate declined to an almost three-year low of 8.5 percent, Labor Department figures showed earlier this month. Meantime, mortgage rates have fallen to a record-low 3.88 percent as of Jan. 19, according to data by Freddie Mac. “Consumers are beginning to realize that housing represents an undeniable value proposition, and accordingly demand is growing,” Stuart Miller, chief executive officer at Miami-based Lennar Corp. (LEN), said on a Jan. 11 conference call. “As I look ahead to 2012, I’m cautiously optimistic that we’re seeing a real bottom form and that we will begin to see signs of recovery.” Still, Federal Reserve officials are concerned that “high unemployment and weak income growth have made it difficult for many households to purchase homes despite the large declines in house prices and mortgage rates. Weak demand to purchase homes and the restricted supply of mortgages has put considerable downward pressure on house prices in many areas,” they said in a Jan. 5 report delivered to Congress. Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac Inc., an Irving, California-based data seller, said Jan. 12. Streamlining the refinancing process, easing borrowing requirements to allow investors to buy single-family properties in bulk and modifying existing loans were among measures the central bank’s report proposed to assist the housing market. “One of the questions that potential buyers or potential investors are looking at is how much inventory is there still to come on the market,” Fed Governor Elizabeth Duke said during a Jan. 16 speech. “Such low levels of sales” indicate “it’s still going to be a long time before the inventory backlog is worked through.”
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#1. To: Brian S (#0)
They tried to bury the pertinent information.
Cheaper homes are selling. The hot neighborhoods in my area are all somewhat depressed more in nature rather than price.
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