New Home Sales Decline 2.2%

Sales of new single-family houses in December 2011 were at a seasonally adjusted annual rate of 307,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.2 percent below the revised November rate of 314,000 and is 7.3 percent below the December 2010 estimate of 331,000.

The median sales price of new houses sold in December 2011 was $210,300; the average sales price was $266,000. The seasonally adjusted estimate of new houses for sale at the end of December was 157,000. This represents a supply of 6.1 months at the current sales rate.

An estimated 302,000 new homes were sold in 2011. This is 6.2 percent below the 2010 figure of 323,000.

Homeownership Matters to State of the Union

The following is a statement by National Association of Realtors® President Moe Veissi:

“The National Association of Realtors® commends President Obama for his remarks in support of homeowners and the struggling housing market during tonight’s State of the Union address. As leading advocates for homeownership, Realtors® know that restoring the health of the housing market is the only way to achieve a broader economic recovery.

“Realtors® stand ready to help Congress and the administration implement Obama’s proposal to significantly reduce monthly mortgage payments by streamlining the refinancing process.

But beyond that, we must make housing a national public policy priority. Realtors® believe that more must be done to stem the rising inventory of foreclosed homes and address the lack of available and affordable mortgage financing, which is inhibiting a meaningful housing market recovery.

“Our families, communities, the housing market and economy all suffer when people lose their home to foreclosure. Realtors® are calling upon the Obama administration, Congress and lenders to help keep more people in their homes by taking more aggressive steps to modify loans and help homeowners significantly reduce their monthly mortgage payments.

“Realtors® also urge the government and lenders to streamline the often time-consuming and inefficient short sales process and to quickly approve reasonable offers when a family is absolutely unable keep their home. Keeping people in their homes and reducing foreclosures will help minimize the negative impact of distressed properties on home values and neighborhoods.

“Expanding financing opportunities could also help reduce excess inventories of distressed properties. Increased fees and higher down payments are making it harder for many creditworthy homebuyers and investors to obtain financing, thwarting the sale of distressed properties and prolonging the impact those homes have on local markets.”

“While we are beginning to see early signs of stabilization in the housing market, NAR calls on Congress and the Obama administration to come together and make housing a priority issue. In this vein, we urge the White House to host a national housing summit to encourage a broad discussion among stakeholders to help formulate and advance policies that move the country toward a real housing and economic recovery.”

Pending Home Sales Fall 3.5% in December

After reaching a 19-month high, pending home sales eased in December but stayed above year-ago levels, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 3.5 percent to 96.6 in December from 100.1 in November but is 5.6 percent above December 2010 when it was 91.5. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said the trend line remains positive. “Even with a modest decline, the preceding two months of contract activity are the highest in the past four years outside of the homebuyer tax credit period,” he said. “Contract failures remain an issue, reported by one-third of Realtors® over the past few months, but home buyers are not giving up.”

Yun said some buyers successfully complete the sale after a contract delay, while others stay in the market after a contract failure and make another offer. “Housing affordability conditions are too good to pass up,” he said. “Our hope is lending conditions will gradually improve with sustained increases in closed existing-home sales.”

The PHSI in the Northeast declined 3.1 percent to 74.7 in December and is 0.8 percent below a year ago. In the Midwest the index rose 4.0 percent to 95.3 and is 13.3 percent higher than December 2010. Pending home sales in the South slipped 2.6 percent to an index of 101.1 in December but are 4.9 percent above a year ago. In the West the index fell 11.0 percent in December to 107.9 but is 3.7 percent higher than December 2010.

Existing-Home Sales Rise for 3 Consecutive Months

Existing-home sales continued on an uptrend in December, rising for three consecutive months and remaining above a year ago, according to the National Association of Realtors®.

The latest monthly data shows total existing-home sales rose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010. The estimates are based on completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.

Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to another record low of 3.96 percent in December from 3.99 percent in November; the rate was 4.71 percent in December 2010; recordkeeping began in 1971.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”

Existing-Home Sales by Housing Type

Single-family home sales increased 4.6 percent to a seasonally adjusted annual rate of 4.11 million in December from 3.93 million in November, and are 4.3 percent higher than the 3.94 million-unit pace a year ago. The median existing single-family home price was $165,100 in December, which is 2.5 percent below December 2010.

Existing condominium and co-op sales rose 8.7 percent to a seasonally adjusted annual rate of 500,000 in December from 460,000 in November but are 2.0 percent below the 510,000-unit level in December 2010. The median existing condo price was $160,000 in December, down 3.0 percent from a year ago.

Existing-Home Sales by Region

Regionally, existing-home sales in the Northeast jumped 10.7 percent to an annual pace of 620,000 in December and are 3.3 percent above a year ago. The median price in the Northeast was $231,300, which is 2.7 percent below December 2010.

Existing-home sales in the Midwest rose 8.3 percent in December to a level of 1.04 million and are 9.5 percent above December 2010. The median price in the Midwest was $129,100, down 7.9 percent from a year ago.

In the South, existing-home sales increased 2.9 percent to an annual level of 1.76 million in December and are 3.5 percent above a year ago. The median price in the South was $146,900, down 1.1 percent from December 2010.

Existing-home sales in the West rose 2.6 percent to an annual pace of 1.19 million in December but are 0.8 percent below December 2010. The median price in the West was $205,200, up 0.3 percent from a year ago.

December Housing Starts

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced new residential construction statistics for December 2011.

BUILDING PERMITS

Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 679,000. This is 0.1 percent below the revised November rate of 680,000, but is 7.8 percent above the December 2010 estimate of 630,000.

Single-family authorizations in December were at a rate of 444,000; this is 1.8 percent above the revised November figure of 436,000. Authorizations of units in buildings with five units or more were at a rate of 209,000 in December. An estimated 611,900 housing units were authorized by building permits in 2011. This is 1.2 percent above the 2010 figure of 604,600.

HOUSING STARTS Privately-owned housing starts in December were at a seasonally adjusted annual rate of 657,000. This is 4.1 percent below the revised November estimate of 685,000, but is 24.9 percent above the December 2010 rate of 526,000.

Single-family housing starts in December were at a rate of 470,000; this is 4.4 percent above the revised November figure of 450,000. The December rate for units in buildings with five units or more was 164,000. An estimated 606,900 housing units were started in 2011. This is 3.4 percent above the 2010 figure of 586,900.

HOUSING COMPLETIONS Privately-owned housing completions in December were at a seasonally adjusted annual rate of 605,000. This is 9.2 percent above the revised November estimate of 554,000 and is 7.1 percent above the December 2010 rate of 565,000.

Single-family housing completions in December were at a rate of 448,000; this is 0.9 percent below the revised November

rate of 452,000. The December rate for units in buildings with five units or more was 147,000. An estimated 583,900 housing units were completed in 2011. This is 10.4 percent below the 2010 figure of 651,700.