The median price of existing homes in 2014 rose to its highest level since 2007, but total resales fell 3.1 percent from 2013, according to the National Association of Realtors.
The national median existing-home price was $208,500, the highest since 2007 ($219,000) and a 5.8 percent increase from 2013 ($197,100).
The median existing-home price for all housing types in December was $209,500, which is 6.0 percent above December 2013. This represents the 34th consecutive month of year-over-year price gains.
For all of 2014, there were 4.93 million sales of existing homes, a 3.1 percent decline from 2013 (5.09 million). That’s the first decline in three years.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 2.4 percent to a seasonally adjusted annual rate of 5.04 million in December, from a downwardly-revised 4.92 million in November.
From a year ago, December sales were higher by 3.5 percent and are now above year-over-year levels for the third straight month.
First-time buyers made up 29 percent of transactions in December, as well as for the year. That’s well below what is needed to help boost further growth in the housing market.
Lawrence Yun, NAR chief economist, says sales picked up in December to close a 2014 that got off to a sluggish start — but showed encouraging signs in the second half of the year.
“Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated,” he said. “Sales were measurably better in the second half – up 8 percent compared to the first six months of the year.”
Total housing inventory at the end of December dropped 11.1 percent to 1.85 million existing homes available for sale, which represents a 4.4-month supply at the current sales pace – down from 5.1 months in November. Unsold inventory is now 0.5 percent lower than a year ago (1.86 million).
“A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub-4 percent interest rates,” says Yun.
Housing costs – both rents and home prices – are still outpacing wages and that’s a barrier for potential buyers trying to save for a downpayment, Yn said.