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January 20, 2011 in Business, Nation/World
2010 weakest year for home sales since 1997
WASHINGTON — The number of people who bought previously owned homes last year fell to the lowest level in 13 years. But home sales in December jumped to fastest pace in seven months.
The National Association of Realtors says sales dropped 4.8 percent to 4.91 million units in 2010. That was slightly lower than 2008, which had been the weakest level since 1997.
Home prices have been depressed by a record number of foreclosures and high unemployment. Many potential buyers held off on purchases last year, fearful that prices hadn’t bottomed out yet.
The poor year for sales ended strong in December. Buyers snapped up homes at a seasonally adjusted annual rate of 5.28 million units, an increase of 12.8 percent from November and the strongest sales pace since last May.
Still, many economists believe it will take years for sales to rise to a normal level of around 6 million units a year. And some say 2011 will be even weaker than last year because more foreclosures are expected and home prices are likely to keep falling through the first six months of the year.
The foreclosure crisis has left a glut of unsold houses on the market. That has played a major role in lowering home prices.
For December, the inventory of unsold homes stood at an 8.1 months supply, down from 9.5 months supply in November. That represents the amount of time it would take to sell the remaining supply of homes on the market at the December sales pace. A normal inventory supply is six months.
Even historically low mortgage rates have done little to boost the sales.
The average rate on a 30-year fixed mortgage rose to 4.74 percent this week from 4.71 percent the previous week, Freddie Mac said Thursday. The average rate on the 15-year loan, a popular refinance option, slipped to 4.05 percent from 4.08 percent.
The 30-year loan rate reached a 40-year low of 4.17 percent in November, and the 15-year mortgage rate fell to 3.57 percent, the lowest level on records dating back to 1991.
For December, sales were up in all parts of the country with the strongest gain a 16.7 percent increase in the West. Sales rose 13 percent in the Northeast, 10.1 percent in the South and 11 percent in the Midwest.
The median price for a home sold in December was $168,800, down 1 percent from a year ago.
© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Orange on January 20 at 10:07 a.m.
Buying up cheap foreclosures in December? Isn’t that the reason for the increase?
bdr on January 20 at 6:38 p.m.
Well when you tank housing from its high median of 230k and damage 18 million Americans, housing is virtually 100k off.
dragging down over 80 million homeowners underwater.
Then compound the problem is a housing based economy that employed over 50 million and virtually throw 50 million out of the workforce (earning over 35k per year building housing products). 2000-2010
you have upset housing all the way back to 90k median year 1997.
But wait……..your compound problems have doubled.
you have built twice the houses that you need from 1997 to 2011. (our population hasn’t doubled from 97-2011)
Americas only hope to forestall a second housing depression is for our workers to migrate like Mexicans to Brazil,Somalia,China to recoup our blessed riches that we have so foolishly given away with free trade.