Published January 22, 2013
NEW YORK – Home resales unexpectedly fell in December as fewer people put their properties on the market, although not by enough to derail the boost housing will likely provide to the economy this year.
The National Association of Realtors said on Tuesday that existing home sales dropped 1.0 percent last month to a seasonally adjusted annual rate of 4.94 million units.
That was still the second highest rate of sales since November 2009, when a federal tax credit for home buyers was due to expire.
Sales were below the median forecast of a 5.1 million-unit rate in a Reuters poll.
The U.S. housing market tanked on the eve of the 2007-09 recession and has yet to fully recover, but steady job creation helped the housing sector last year, when it likely added to economic growth for the first time since 2005. The nation's inventory of existing homes for sale fell 8.5 percent from November to 1.82 million, the lowest level since January 2001.
SAM BULLARD, SENIOR ECONOMIST, WELL FARGO SECURITIES, CHARLOTTE, NORTH CAROLINA:
"We had gotten such a strong number on housing starts so the expectations were high. The optimism with this number didn't pan out. With the tax law changes, people were trying to sell their homes before year-end.
"It's still an improving trend. The fundamentals are still there for the housing market in 2013. We still have very low mortgage rates and home prices are rising. The upcoming spring home season could be one of the better ones we will see in some time."
JONATHAN GARBER, MACRO ANALYST, BRIEFING.COM, CHICAGO: "Existing home sales number was a little bit of a disappointment. Housing data has been improving over the past seeral months, but what will be important is the spring buying season. That data will show if this so-called recovery in housing continues."
PATRICK NEWPORT, ECONOMIST, IHS GLOBAL INSIGHT, LEXINGTON, MASSACHUSETTS:
"I was expecting a surge a short-sales at the end of the year and it wasn't as strong as I had thought. The number still looked better than the beginning of the 2012.
"The key number in this report is the inventory number. What's driving the housing market right now is because there's not that much supply and mortgage rates are really low. The outlook for housing is better this year than last year. We think most of the GDP growth in the first quarter will come in at 0.3 percent and virtually of that will come from residential investments."
GARY SHILLING, PRESIDENT OF A. GARY SHILLING & CO IN SPRINGFIELD, NEW JERSEY:
"There are a lot of seasonal adjustments around this time of year, so it doesn't take much to shift the number, but there is still reason for caution with the housing sector. A lot of the activity we've seen is in rental housing, there's been virtually no movement in mortgage applicants for new homeowners. Everything says the strength is in rentals, which is not a good sign for the market. If you don't have new buyers coming in, you won't have much by way of longevity."
ANDREW DILZ, CURRENCY TRADER, TEMPUS CONSULTING, WASHINGTON:
"It's a surprise, for sure. The disappointing print might put some pressure on the euro for today, though I don't see any major moves. Overall, recent U.S. housing data has been better, and I still think the U.S. economy will have an encouraging first quarter."
(Americas Economics and Markets Desk; +1-646 223-6300)