For the first time in seven years, annual U.S. home sales have
improved from one year to the next, with 2012 sales showing a 6
percent increase over 2011 figures, according to figures released
today by CoreLogic.
Last year saw a total of 4.2 million home sales, according to
CoreLogic's figures, up from 3.9 million in 2011. It's the first
whole year-over-year increase since 2005.
Home prices were up as well, posting a 6.3 percent increase over
2011, based upon repeat sales of the same property. That was the
largest year-to-year increase since 2006, according to CoreLogic
Home Price Index.
"Housing was one of the past year's biggest surprises," wrote
Mark Fleming, chief economist for CoreLogic, summarizing the past
year. "Even without significant gains in income, housing mounted an
impressive recovery in 2012."
Strong prices increases expected in 2013
Looking ahead, the company is expected a further 6 percent rise
in U.S. home prices in 2013, with a combination of low mortgage
rates and home prices driving steady demand, along with a reduced
level of foreclosure sales and a limited inventory of unsold
Despite the healthy increase in home sales last year, the total
number of homes sold remains well below the 5.5 million annual
figure that was typical in early 2000s.
The major factors driving the improvement in the housing market
in 2012 were a reduction in foreclosure sales and a smaller
inventory of homes for sale, according to Sam Kahter, a CoreLogic
senior economist. He wrote that the decline in foreclosure sales
drove a sharp improvement in home prices last year, as mortgage
servicers pursued short sales and other alternatives to foreclosure
in dealing with distressed properties.
Underwater homes limit sales inventory
Ironically, a key factor driving the increase in home values in
2012 was that many homeowners have seen their homes sharply fall in
value since the housing bubble collapsed. The large number of
underwater mortgages means that many homeowners who would like to
sell are holding their properties off the market until home values
recover. That has limited the supply of available homes for sale,
driving up prices.
Rising prices are expected to bring more of these homeowners
onto the market in coming years, but not so fast that they flood
the market and drive prices down.
Foreclosure sales, delinquencies show big drops
A key factor in the improvement of the housing market in 2012
was a sharp rise in nondistressed home sales, which increased 11
percent over their 2011 levels to 3.2 million units. Meanwhile,
sales of foreclosed residential properties dropped 20 percent to
600,000, while short sales increased 23 percent to 370,000 units,
their highest level since the housing crash.
As a share of the market, foreclosure sales dropped sharply
throughout the year, from 20 percent of all home sales in January
2012 to 11 percent in October, the most recent month for which
figures were available.
Mortgage delinquencies were also down significantly in 2012,
falling by 300,000 loans to 6.9 percent of outstanding mortgages,
down from 7.4 percent in 2011. Serious mortgage delinquencies are
down by 1 million loans from their peak in 2010.
First published on MortgageLoan.com at: