U.S. home prices have posted their strongest annual increase in
seven years, showing a 10 percent gain in the fourth quarter of
2012 compared to the same period one year earlier.
The median sales price for single-family homes in the last three
months of 2012 was $178,900, according to figures released today by
the National Association of Realtors (NAR), up from $162,600 in the
fourth quarter of 2011. It's the biggest annual increase since a
13.6 percent rise in the year ending in the fourth quarter of
"Home sales are being fueled by a pent-up demand and job
creation, along with still favorable affordability conditions and
rents rising at faster rates," said Edward Yun, NA chief economist.
"Our population has been growing faster than overall housing stock,
so supply and demand dynamics are very much at play."
Shrinking inventory, distressed sales boost prices
Prices were boosted in part by a shrinking inventory of homes
for sale, which fell to 1.83 million units in the fourth quarter of
last year, down from 2.32 million one year earlier. It's the lowest
number of single-family properties on the market since January
2001, when the inventory was reported at 1.78 million
Distressed properties, both foreclosures and short sales, are
making up a smaller share of the market, which also contributed to
the increase in median home prices. Distressed sales made up 23
percent of all single-family home transactions in the fourth
quarter of 2012, down from 30 percent one year earlier.
The rise in home prices was broad-based, with annual increases
reported for 133 of the 152 metropolitan areas covered by the NAR
Home sales showed similar gains for the year as did home prices.
Sales of single-family homes in the fourth quarter were at an
annual pace of 4.90 million, up 12.1 percent from the fourth
quarter of 2011. It was the highest quarterly annual rate of sales
reported since 4.95 million in the last quarter of 2009.
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