Purchases of previously owned homes climbed in December for the first time in four months as job gains and healthier household balance sheets helped Americans adjust to higher mortgage rates.
Sales rose 1%, less than projected, to a 4.87 million annual pace, the National Association of Realtors reported today in Washington. Purchases in the Northeast and Midwest fell, which may have reflected bad weather, the group said. The median forecast of economists in a Bloomberg survey called for a 4.93 million rate. The gain capped the strongest year for the industry since 2006.
Faster employment growth, rising property values and a decline in consumer debt are giving would-be buyers more confidence to make purchase decisions. Builder confidence has also picked up along with new construction, signaling housing will be a source of strength for the economy this year.
“Housing is on the mend,” Anika Khan, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “It’s had a few negative factors to impact it and some slowdown activity, but that’s to be expected, especially this time of year.”
Estimates in the Bloomberg survey of 76 economists ranged from a sales pace of 4.8 million to 5.1 million. November’s figure was revised to 4.82 million from a previously reported 4.9 million. Purchases increased 9.1% in 2013 to 5.09 million.
Another report today showed applications for unemployment benefits held near a six-week low, showing firings remain muted following the holidays. Jobless claims rose by 1,000 to 326,000 in the period ended Jan. 18, the Labor Department said in Washington.
Stocks remained lower after the figures as a gauge of China’s manufacturing contracted. The Standard & Poor’s 500 Index declined 0.9% to 1,828.44 at 10:08 a.m. in New York.
The median price of an existing home rose 9.9% to $198,000 in December from $189,200 a year earlier, today’s report showed. For all of 2013, the median price climbed 11.5%, the most in eight years, to $197,100.
The number of existing properties for sale fell 9.3% to 1.86 million from a month earlier. At the current pace, it would take 4.6 months to sell those houses, the lowest since February, compared with 5.1 months at the end of November. Inventory was up from 1.83 million a year earlier.