Sales of previously-owned houses rebounded in December to above a 5 million annual pace, the National Association of Realtors reported Friday.
The 5.04 million annual rate, adjusted for seasonal fluctuations, was an improvement over November’s 4.92 million, and right in line with economists’ expectations.
Friday’s existing home sales add to other new data showing that the housing recovery that stalled out toward the early part of 2014 improved toward the end of the year.
There were 4.93 million existing home sales in 2014, according to NAR, down over 3 percent from 2013’s 5.09 million.
The slowdown came following a significant rise in mortgage rates at the end of 2013. Rates have been falling again to end 2014, however, with the average 30-year fixed-rate mortgage interest rate falling back to 3.63 percent in the most recent data collected by Freddie Mac.
Inventory of homes for sale also dropped in December, from 2.08 million to 1.85 million. Higher inventory weighs against price increases.
Nevertheless, there was encouraging news in Friday’s report. The number of sales precipitating by foreclosures or short sales was down significantly on the year. Overall, the number of such “distressed sales” decreased by nearly 20 percent over the course of the year, demonstrating the continuation of the long, slow recovery from the mortgage crisis and general improvement in the economy.
The number of first-time homebuyers, however, edged down to 29 percent in December, well below its historical average of 40 percent. The NAR found in a separate survey that the annual share of first-time homebuyers was at its lowest level in three decades.
The Obama administration has tried to make affording a home easier for new entrants to the market, amid concerns that weak job prospects and the burden of student loans has prevented younger buyers from embracing homeownership.
The Federal Housing Administration announced in January that it would lower fees for mortgage insurance for home loans generally used by first-time buyers. President Obama touted that effort as part of his middle-class economics package in his State of the Union address Tuesday.
The Census Bureau reported earlier in the week that construction of new homes picked up to a 1.09 million annual rate in December, with the strongest improvement in single-family starts. New home construction is also a sign of underlying demand for housing.
