Home Prices Show 10% Annual Gain

Shutterstock photo

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 2005.

"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 survey.

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.

First published at: http://www.mortgageloan.com/home-prices-show-10-annual-gain-9360

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Real Estate

More from MortgageLoan.com




Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com