Continuous Rise in US Real Estate Prices Met by Slip in Sales
The sales of existing homes in the United States eased a bit towards the end of 2012, but the numbers are still higher than they were in December 2011. The NAR (National Association of Realtors) said that the total volume of sales in 2012 was the highest recorded by the US real estate market in the past five years.
The annual prices of existing American homes rose to their peak since 2005. Sales of existing homes (including condominiums, co-ops, town homes and single-family homes) fell by 1% in December – a decline from November. However, the figures still remain 12.8% higher when compared to December 2011.
The initial existing-home sales increased 9.2% compared to 2011. “Since 2007, this has been the highest volume of recorded sales in the US” according to Stewart Holley Senior Vice President of Real Estate Law Series. It is also the best increase in the past eight years.
Chief economist of the National Association of Realtors, Mr. Lawrence Yun said that homebuyers have benefited from low mortgage rates. However, restrictive underwriting standards for mortgages and tight inventory are limiting the number of sales, according to Yun. Prices are expected to be higher going into the New Year; job creation is forecasted to fuel the growth of the real estate market.
Bottom Line: The market is improving, however, higher home prices likely to temper growth over the two years.
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