WASHINGTON — Sales of existing homes unexpectedly dropped in December as the lowest supply in more than a decade cut into the industry’s best year since 2007.
Purchases fell 1 percent to a 4.94 million annual rate last month, figures from the National Association of Realtors showed Tuesday in Washington. The reading was still the second-highest since November 2009. The median forecast of 79 economists surveyed by Bloomberg called an increase to a 5.1 million rate.
Even with December’s setback, 4.65 million homes were sold for all of 2012, the most in five years and a sign the housing market is taking steps toward recovery. The usual drop in supply at this time of year combined with a pickup in demand spurred by historically low mortgage rates and an improving job market is keeping inventories lean, pushing prices up even higher after last year’s rebound.
“This isn’t worrisome at all,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, who projected a drop to a 4.95 million annual rate. “For the first time in awhile, it looks like it’s a sellers’ market as much as it’s a buyers’ market. I suspect prices and sales will go up again in 2013.”
The number of previously owned homes on the market dropped to 1.82 million, the fewest since January 2001, according to Tuesday’s report. At the current sales pace, it would take 4.4 months to sell those houses, the lowest since May 2005, compared with 4.8 months at the end of November.
The Triangle now has a four-month supply of homes on the market at the current pace of sales, according to Triangle Multiple Listing Services data. There were 7,345 homes on the market as of the end of December, down 19 percent from the same period the year before.
“The only concern going into 2013 is the inventory situation,” Lawrence Yun, NAR chief economist, said in a news conference Tuesday as the figures were released. “Price increases are almost guaranteed going into 2013,” Yun said, adding that the group’s projection of a 4 percent to 5 percent increase this year may be exceeded.
Staff writer David Bracken contributed.