Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Existing home sales jump 12%

By Blake Ellis, staff reporter

NEW YORK (CNNMoney) -- Sales of existing homes jumped in December, marking the fifth month of gains in the past six months, based on an industry report released Thursday.

Previously-owned home sales climbed 12.3% in December to an annual rate of 5.28 million, from 4.70 million in November, according to the National Association of Realtors.

That puts sales at the highest level since the homebuyer tax credit expired in June, said Stuart Hoffman, chief economist at PNC Financial Services Group.

The December rate came in much higher than expected. A consensus of experts surveyed by Briefing.com had forecast an annualized sales rate of 4.8 million. However, sales were down 2.9% from 12 months earlier and fell 4.7% in 2010.

"December was a nice finish to the year, but looking at the bigger picture -- home sales and prices have been scraping along the bottom for the last three years," Hoffman said. "So, while we're not digging a deeper hole -- the housing market is still quite weak, and there are still more homes available on the market than there are likely to be buyers."

The median price of all existing homes sold in December was $168,800, down 1% from a year ago.

Meanwhile, the inventory of homes on the market fell 4.2% in December to 3.56 million units. That's enough inventory to last 8.1 months, and is down from a 9.5-month supply in November.

While that's an improvement, Hoffman said that data doesn't reflect the large number of foreclosures that could soon enter on the market.

"What's hidden behind the curtain are potential foreclosures adding to those inventory levels," he said. "Even as we have jobs growing, inventory is still large and more foreclosures are going to be coming on the market. Prices will go down and it's going to continue to be very much a buyer's market."

That said, Hoffman expects sales to gradually improve -- rising about 4% or 5% -- by the end of 2011, as the employment picture improves.

"I do think there will be more sales in 2011, because job growth will support homebuyers," Hoffman said. "We're getting back to the underlying demand without the homebuyer tax credit, but housing is still not contributing much to the overall economic improvement in the economy."  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.49%3.47%
15 yr fixed2.69%2.70%
5/1 ARM2.99%2.99%
30 yr refi3.49%3.49%
15 yr refi2.72%2.72%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
  • Find Homes for sale
    Real estate and homes for sale on Trulia

  • Property Type
  • Find a home in: New York | Atlanta | Chicago | Los Angeles
  • Washington D.C | Houston | Philadelphia | More options
Index Last Change % Change
Dow 18,145.71 -16.64 -0.09%
Nasdaq 5,257.40 15.57 0.30%
S&P 500 2,141.16 -0.18 -0.01%
Treasuries 1.74 0.00 0.00%
Data as of 12:22am ET
Company Price Change % Change
Reynolds American In... 53.78 6.61 14.01%
Chesapeake Energy Co... 6.68 -0.23 -3.33%
AT&T Inc 37.49 -1.16 -3.00%
Microsoft Corp 59.66 2.41 4.21%
Bank of America Corp... 16.67 0.11 0.66%
Data as of Oct 21


Wells Fargo's vast network of branches hasn't buckled much in recent years. But that may not change, experts say. More

Passes for the new National Museum of African-American History and Culture in Washington D.C. are 'sold out' through March 2017. More

A number of popular websites were down for some users on Friday in what appears to be a massive DDoS attack. More

The University of Illinois partnered with Coursera to launch one of the most affordable online MBA programs yet. More