The Rise in Number of Home Sales Indicate the Housing Recovery

home-salesThe National Association of Realtors announced that house sales have dropped in December as compared to the figures in November. The phenomenon was explained by a limited supply of houses available for sale. It has been estimated that the number of sales has increased a compared to last year and it has reached the highest level over the last five years. The home sales in 2012 amounted to 4.65 million as per NAR reports which shows an increase of 9.2 percent when compared to home sales that occurred in 2011 and it is the highest figure achieved since 2007.

Many economists are painting a positive picture stating that home sales will increase during 2013 as well. There are many factors that are contributing to the rise in house sales like low mortgage rates, shortage of supply of available houses and stable hiring on the rise. The housing market recovery is obvious through such factors and is expected to continue. The number of homes available for sale has decreased to 1.82 million as in December of 2012, which is the lowest figure in 12 years.

Of the homes purchased only 30 percent were purchased by first-time buyers in December which is a characteristic of healthy markets. Tougher credit standards were enforced on banks and they made larger down payments mandatory due to which many people did not qualify for the lowest mortgage rates. In 2012, this rate was 3.66% on fixed mortgage for thirty years which is the lowest as compared for the last 65 years.

More expensive homes are purchased more often on the other hand. Last year sales of houses that cost over one million dollars went above 62 percent while cheaper home sales dropped by 17 percent. CoreLogic has forecasted that house prices will increase in 2013 by six percent.