Home Prices UP
The latest data from the National Association of Realtors® (NAR) shows that national median existing-home prices jumped by 11.5 percent for all of 2013 finishing the year at $197,100. This was a substantial increase over median prices for 2012, which finished at $176,800. The gain for 2013 was the “strongest gain since 2005 when it rose 12.4 percent.”
For the month of December national median existing-home prices, for all types of housing, was $198,000, this was a 9.9 percent increase over the same period in 2012.
Sales of distressed homes, which include foreclosures and short sales, accounted for 14.0 percent of all sales activity in December, and were essentially unchanged from November’s numbers. In December of 2012 distressed sales were at 24 percent, leading analysts to state that the December 2013 increase in home prices were due in part to the continued “shrinking share of distressed sales.”
Unfortunately fist-time buyers continue to account for a smaller share of overall home purchases with only 27 percent of purchases going to first-timers in December, this was down from 28 percent in November and 30 percent in December 2012. In a normal market first-time buyers usually make up about 40 to 45 percent of overall homes purchases.
The NAR says that all-cash sales comprised 32 percent of total transactions in December, which was unchanged from November, but the 32 percent was an increase over December of 2012 when they accounted for 29 percent of sales. Individual investors purchased 21 percent of all homes in December, up from 19 percent in November, but investor purchases were unchanged from December 2012.
NAR President Steve Brown noted that with jobs expected to improve this year, sales should hold even despite rising home prices and higher mortgage interest rates. He said, “The only factors holding us back from a stronger recovery are the ongoing issues of restrictive mortgage credit and constrained inventory,” he added, “With strict new mortgage rules in place, we will be monitoring the lending environment to ensure that financially qualified buyers can access the credit they need to purchase a home.”