National Sales Data: 2013 in Review
The 2013 housing market ended on both a positive and a negative; while existing-home sales rose slightly from November to December by 1.0 percent, they were still 0.6 percent lower than at the same time last year. The housing market might have suffered from a lack of inventory, but not enough to hamper 2013's impressive sales growth. Despite December's downturn, home sales in 2013 were the strongest in seven years. The entire year saw a pace of 5.09 million sales, a figure that is 9.1 percent higher than 2012. This is the strongest the market has performed since 2006, when a housing boom brought a robust 6.48 million sales to the market.
More Buyers, Eager Buyers
Since 2011, home sales have increased by nearly 20 percent. As expected, record-low mortgage interest rates have driven more buyers into the housing market, but so too has job growth. With unemployment rates dropping in many sectors across the country, more people now qualify for those low mortgage rates. Also, the recent upturn in the housing market seems to have convinced many buyers to purchase now rather than later. Home prices are not expected to drop; buyers who do not sign their contracts now risk paying higher prices.
Prices Are Rising
The year 2013 saw the strongest increase in home prices since 2005. The national median existing-home price for 2013 was $197,100, a staggering 11.5 percent climb from last year's median of $176,800. These rising home prices, along with an increase in mortgage interest rates, should put downward pressure on home sales. The improving job market, however, should keep sales from falling too drastically. But unless the problems of limited inventory and restrictive mortgage credit are solved, 2014's sales figures might not be as strong as 2013's.
Region by Region
In the Northeast, existing-home sales dropped 1.5 percent but are still 3.2 percent higher than December 2012. The year-over-year increase in sales continued in the South; with a rise in sales of 3.0 percent from November to December, the South closed out 2013 with a sales pace 4.6 percent higher than a year earlier. In the Midwest, not only did sales fall 4.3 percent, but December's 1.11 million pace was 0.9 percent lower than at the same time last year. And inventory woes continued in the West; while sales rose 4.8 percent in the last month of the year, the housing shortage resulted in a drop of 10.7 percent from December 2012 to December 2013. Multiple bidding in the West did, however, drive home prices up; the median price reached $285,000, up 16.0 percent from December 2012.