Rising home prices, sales point to strong 2013
With another wave of positive news this week, the housing market looks to continue its rebound in 2013.
The lack of a full-blown housing recovery has been probably the biggest drag on the economy over the last couple years. On several occasions, Federal Reserve Chairman Ben Bernanke has called the housing market the biggest roadblock to a full economic recovery.
Several key reports came out this week, all showing strong growth in the market:
- Housing starts – November’s annual rate of 861,000 was 21.6 percent higher than in November 2011, the Commerce Department reported. Housing permits – an indicator of future activity – were up 26.8 percent from a year ago to hit their highest level since July 2008.
- Existing home sales – The National Association of Realtors reported a seasonally adjusted annual rate of 5.04 million sales for November, up 14.5 percent from 2011. Total inventory on the market fell to a 4.8-month supply, it’s lowest level since September 2005.
- Home prices – Two reports out today showed a healthy increase in home prices, as well. Zillow estimates home values have increased 6 percent this year, the first annual increase Zillow has reported since 2006. The Federal Housing Finance Agency also reported that prices were up 5.6 percent for the 12 months ending in October.
- Builder confidence – The National Association of Home Builders/Wells Fargo Housing Market Index, which measures confidence of builders of single-family homes, rose for the eighth straight month in December. It still stands in “negative” territory, though, with a reading of 47. Fifty is considered the break-even point where more builders are optimistic about the market than are not.