Sales of U.S. existing homes unexpectedly dropped in December, restrained by the lowest supply of properties in more than a decade.
Purchases fell 1 percent to a 4.94 million annual rate last month, figures from the National Association of Realtors showed Tuesday. The reading was still the second-highest since November 2009. The median forecast of 79 economists surveyed by Bloomberg News called for sales to increase to a 5.1 million rate.
Even with December’s slip, 4.65 million homes were purchased for all of 2012, the most since 2007 and a sign the housing market is making steps toward recovery. Historically low mortgage rates, an improving job market and an increasing number of households will probably spur demand for housing this year.
In Ohio, meanwhile, sales of homes rose 12.7 percent over the prior year and the average sales price jumped 5.5 percent statewide, according to the Ohio Association of Realtors.
“The Ohio housing market made significant progress in its attempt to fully recover from the economic challenges of the past few years,” said Thomas J. Williams, president of the Ohio Association of Realtors, in a prepared statement.
Year-end 2012 sales of new and existing homes — January through December — totaled 114,457, a 12.7 percent increase from the 101,561 sales posted in 2011, according to the statistics provided by the state’s Multiple Listing Services.
Ohio sales in December 2012 reached 8,390, a 6.6 percent increase from the 7,867 sales posted during the month in 2011. The average sales price of $132,698 in December was a 7.7 percent increase from the $122,447 average price posted in December 2011.
Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, said of the national trend, “This isn’t worrisome at all.
Hoffman projected a drop to a 4.95 million annual rate. “For the first time in a while, 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.”
Sales last year climbed 9.2 percent from 4.26 million in 2011.
The median price of an existing home rose to $180,800 last month, up 11.5 percent from $162,200 in December 2011. It was the biggest year-over-year gain since November 2005.
Another measure of prices, the S&P/Case-Shiller index of homes in 20 cities, most recently showed home values increased 4.3 percent in October from a year earlier, the biggest gain since May 2010. The gauge is up almost 9 percent since reaching a 10-year low in March.
The number of previously owned homes on the market dropped to 1.82 million, the fewest since January 2001. 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 only concern going into 2013 is the inventory situation,” Lawrence Yun, NAR chief economist, said.
“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.
Record-low borrowing costs underpinned housing gains last year. The average rate on a 30-year, fixed mortgage was 3.38 percent last week, hovering near the 3.31 percent reached a month earlier that was the lowest in data going back to 1972, according to mortgage guarantor Freddie Mac.
For 2013, sales of existing homes will rise about 7.2 percent to 4.98 million, the highest since 2007, according to the median estimate of economists and housing analysts surveyed by Bloomberg. Prices will gain 3.3 percent after an estimated 4.5 percent jump in 2012, according to the forecasters.
Beacon Journal business writer Katie Byard contributed to this report.