Despite optimism that pent-up demand for housing was finally filtering into the market, existing-home sales eased slightly in December, according to an industry report released Tuesday.
Total existing-home sales, which include completed sales for single-family homes, townhomes, condominiums, and co-ops, fell 1 percent in December, according to the National Association of Realtors.
Although sales pulled back slightly in December, overall sales for the month are nearly 13 percent higher than in December 2011. Furthermore, projected sales totals for 2013 are more than 9 percent ahead of those for 2011—the highest volume since 2007 and the strongest increase since 2004.
That's all evidence that the housing market has forward momentum going into 2013, says .
"With much of potential homebuyers' economic concerns addressed at year end, mortgage rates remaining at historically low levels and credit becoming more available, we expect to see this positive trend extend into 2013," he said in an E-mail. "We expect that the worst is over for existing homeowners and project a "spring thaw" in the national housing market in the second quarter of 2013 with continued recovery throughout the year."
Much of the optimism for the future prospects for the housing market hinges on job creation and higher household formation, both of which are expected to improve in 2013. Coupled with low mortgage rates, these factors will continue to drive demand for housing in the coming year, according to experts, while persistently tight inventory will continue to push home prices upward. The national median existing-home price was $180,800 in December—11.5 percent above figures the same time in 2011 and the 10th consecutive month of year-over-year price gains and the strongest gain since November 2005.
But while rising home prices might be a boon to would-be sellers, the dearth of homes on the market in the meantime, coupled with still-tight mortgage lending standards could still dampen sales in the short term, NAR Chief Economist Lawrence Yun warned.
"Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales," he said.