The U.S. housing market has been showing improvements with the continued increase in sales of existing homes in December, based on data compiled by the National Association of Realtors. There are also other figures that are encouraging real estate market participants, such as inventory and sales trends.
Increase in Existing Home Sales in December
Nationwide, sales of existing homes increased in December 2011 to an adjusted rate of 4.61 million units, up by 5 percent from an adjusted rate of 4.39 million in November 2011. Compared to December 2010, the December 2011 pace also increased, at a rate of 3.6 percent. This pace includes sales of all types of residential units, including single-family homes, condos, townhomes, villas and co-ops.
Sales of existing condos and co-ops also surged over the month, rising by 8.7 percent from an adjusted rate of 460,000 units in November to 500,000 units in December.
Rise in Existing Home Sales in 2011
Sales of existing homes for all of 2011 also increased over sales in 2010 by 1.7 percent, from 4.19 million units in 2010 to 4.26 million in 2011.
Drop in U.S. Housing Inventory at the End of 2011
The national inventory of existing homes available for sale dropped at the end of December to its lowest point since March 2005 when there were only 2.3 million units listed for sale. At the end of 2011, the nationwide pre-owned inventory dropped year-over-year by 9.2 percent and month-over-month by 7.2 percent to 2.38 million units. This total is almost just a half of the peak volume in July 2007 when there were 4.04 million existing units on the market.
A declining inventory can be seen as a positive sign as it pushes prices to go up. It also means that surges in sales have been moving homes from the market into homeowners’ hands.
Rise in Pending Home Sales in November to 19-Month Peak
The index for pending home sales rose by 7.3 percent to 100.1, the highest point of the index since April 2010 when the index reached 111.5. This was the month homebuyers fastracked their home buying activities to take advantage of the tax credit program. Pending home sales refer to sales contracts signed but have not yet closed. It usually takes four to six weeks from the date of contract signing before a sale is closed.
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