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."
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.35%||4.35%|
|15 yr fixed||3.66%||3.68%|
|30 yr refi||4.34%||4.35%|
|15 yr refi||3.65%||3.65%|
Today's featured rates:
Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More
Honda and General Motors are creating a new generation of fully autonomous vehicles. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Whether you hedge inflation or look for a return that outpaces inflation, here's how to prepare. More