Sales (ETSLTOTL) of previously owned U.S. homes rose for a third month in December to the highest level since January 2011, a sign the housing market ended last year with momentum.
Purchases (ETSLTOTL) increased 5 percent to a 4.61 million annual rate, the National Association of Realtors said today in Washington. The pace was less than the 4.65 million median forecast of economists surveyed by Bloomberg News. The gain helped push down the inventory of homes for sale last month to the lowest level since 2005. Purchases in 2011 climbed 1.7 percent from a year earlier as prices fell.
Historically low mortgage rates and a pickup in employment may be giving Americans the confidence to purchase homes that have fallen in value. At the same time, another wave of foreclosures may inhibit a faster recovery in real estate as more distressed properties are put on the market.
“We’re starting to see improvement in some of the key leading housing indicators,” Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York, said before the report. “First you have to see a recovery in the economy, then consumers have to register improving economic conditions, which seems to be happening already, and then they have to go and start looking for homes.”
Economists’ sales estimates ranged from 4 million to 5 million following November’s previously reported 4.42 million pace. Last month, the group revised down housing figures going back to 2007 by an average 14 percent, showing that the industry that helped spark the 18-month recession was a bigger drag on the U.S. economy than previously estimated.
Existing-home sales, tabulated when a contract closes, rose 1.4 percent from the same month last year. Total sales in 2011 were 4.26 million, compared with a peak of 7.1 million in 2005 during the housing boom. In 2008, sales totaled 4.1 million, the least since 1995.
