WASHINGTON (1/26/15)--For the first time in four years, existing-home sales took a step back in 2014, despite consistently low mortgage rates and a strengthening labor market (MarketWatch Jan. 23).
Existing-home sales fell to 4.93 million units for the year, a 3.1% annual drop, according to numbers from the National Association of Realtors (NAR).
"All the indicators would have pointed to higher sales," said Lawrence Yun, NAR chief economist, referring to the stronger job market, the improved consumer confidence and the thinning mortgage rates that marked 2014 (MarketWatch).
Instead, the economy saw a sales performance that Yun called "mildly disappointing."
Yun still expects, however, that sales will rebound in 2015, as pent-up demand should translate into a healthier market this year.
The final month of 2014 may have signaled the beginning of such an improvement.
In December, existing-home sales rose 2.4% on a seasonally adjusted annualized basis. Led by single-family homes, the monthly performance pushed sales 3.5% above levels seen in December 2013 (Economy.com Jan. 23).
By home type, single-family homes jumped 3.5% in December and sit 4% higher year-over-year, while condominium and co-op sales fell 5% and remain level with their year-ago numbers.
Further, the market for single-family homes tightened significantly in December, according to Moody's.
Single-family inventory dropped 11.9% during the month, and the ratio of inventory to sales fell to 4.4 months from 5.1 months in November.
The West region posted the highest monthly increase in existing-home sales with a 9.8% jump, while the Midwest posted the weakest month with a 3.5% step back in December.
Nationally, the median price for single-family homes came in at $210,200 in December, a 1.1% increase month-over-month and a 6.3% jump year-over-year.