Existing-home sales up in ‘12

Ruth Mantell / MarketWatch /

WASHINGTON — Sales of existing homes ticked down in December from the month before, while the total for 2012 hit the highest level in five years, according to data released Tuesday by the National Association of Realtors.

The pace of sales fell 1 percent in December to a seasonally adjusted annual rate of 4.94 million, according to NAR. For all of 2012, existing-home sales hit 4.65 million, the highest level since 2007 and up 9.2 percent from 2011.

“Record-low mortgage interest rates clearly are helping many homebuyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales,” said Lawrence Yun, the NAR’s chief economist.

The rate in November was revised to 4.99 million from an earlier estimate of 5.04 million, which was the highest rate since November 2009.

Buyers’ concerns about the “fiscal cliff” may be at least partially behind December’s sales decline, wrote Millan Mulraine, macro strategist at TD Securities, in a research note.

By region, it was a mixed bag. December’s existing-home sales fell by 5.9 percent in the Midwest and by 3 percent in the South, compared with the prior month; sales rose by 5.1 percent in the West and by 3.2 percent in the Northeast.

Sales in each of the four regions were up from same period in the prior year.

Despite the decline in December, existing-home sales are up 12.8 percent from the same period in the prior year. The median existing-home price rose 11.5 percent from the prior year to $180,800.

Inventories fell 8.5 percent to 1.82 million units in December, representing at the current sales rate a 4.4-month supply, the lowest supply ratio since 2005. It’s typical for inventories to decline in winter. But Yun warned that persistently low inventory could lead to too much price growth in 2013.

“We don’t want to see a rapid appreciation in prices,” he said.

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