The National Association of Realtors said today that sales of existing homes rose 6.5 percent to an annual rate of 4.74 million in December. The number of unsold homes on the market in last month fell nearly 12 percent to 3.7 million. At the current sales pace, it would take 9.3 months to sell all the properties, down from 11.2 months in November.
The winter months are usually slow for real estate. People tend to not buy homes around the holidays and the weather can be a negative factor. This makes the latest real estate numbers impressive. With interest rates low and credit easier to obtain, people are starting to buy again. A friend of mine, who owns a mortgage lending business, says he is seeing a pickup in loan requests. “Thank God”, he said!
We are starting to see the rapid decline of real estate slow down. There may very well be a bottom in late spring or summer. Sales and prices should start to rise late this year. If that happens, it will be great news for the U.S. and world economies. The one spoiler for this is employment. If the unemployment rate continues to climb, the housing market will be negatively effected.