Although the national economy is still in a volatile state with annual growth below two percent and unemployment hovering around eight percent, the housing market, by most indicators, is moving steadily in a positive direction. Homes sales continue to improve from month to month across the nation and home prices are rising.
According to the National Association of Home Builders there were approximately 368,000 new homes sold across the country in 2012, up substantially from 2011 when there were only 305,000 new homes sold. The same report noted that at the end of December 2012 there was a 4.9 month’s supply of new homes in the nation compared to a 5.4 month’s supply at the same time in 2011. The National Association of Realtors reports existing home sales were up 9.2% and new home sales were up 20% in 2012. The existing home inventory is at a seven year low with a 4.4 month’s supply of homes. Nationally, the market is shifting away from the buyer’s market that we have been experiencing for the past several years. Generally, a six month supply is considered a good balance between a buyer’s and seller’s market.
As the number of homes sold increases and the inventory shrinks there is pressure being put on housing prices. Home prices jumped 8.3% in December compared to the same time a year earlier based on a report by CoreLogic, a real estate data provider. This is the biggest gain on an annual basis since early in 2006. According to the same report, home prices rose in 46 of the 50 states – the top 5 states with home price increases were all in the west. The effect of the pricing increases is that more homeowners may be willing to put their properties on the market and buyers may be more anxious to purchase before prices rise further, helping fuel the housing recovery.
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