Home sales decreased only 3.6 percent in December 2008 over December 2007 compared to a decrease of 20.5% from November 2008 to November 2007 indicating that the "slippery bottom" described in previous reports is alive and well. While one month of improvement does not signal the end of the housing recession, it does indicate that despite the gloomy economic environment housing shows signs of stabilizing.
Several regions showed significant improvement over November results. The West region reported that transactions were up 33.1 percent from December 2007 to December 2008 compared to a rise of only 9.4 percent from November 2007 to November 2008. The Midwest reported that sales were down 8.7 percent in December versus 25.7 percent in November; on the same basis the South reported transactions were down 12.5 percent in December 2008 versus being down 30.4 percent in November 2008 and the Northeast was down 18.8 percent from December 2007 to December 2008 versus being down 27.4 percent from November 2007 to November 2008.
Prices for sales nationally were off 14.4 percent from December 2007 to December 2008; the best region for prices was the Northeast where prices have fallen only 8.7 percent from the same month a year ago while the West had the largest average decline with the average price down 28.9 percent from December 2007; Both the South and Midwest regions reported price declines similar to that seen in earlier months.
REAL Trends Comment: December showed that housing sales held up much better than anticipated and while prices were down the decreases are similar to those recorded in prior months. These results indicate that while recovery may be a way off, price declines and drops in sales are leveling off. Record low mortgage rates, lowered home prices and rising affordability are offsetting the effects of rising unemployment to some extent.
The benchmark 30-year fixed-rate mortgage fell 5 basis points, to 5.28 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week's survey had an average total of 0.42 discount and origination points. One year ago, the mortgage index was 5.75 percent; four weeks ago, it was 5.42 percent. The benchmark 15-year fixed-rate mortgage went the other way, rising 4 basis points, to 4.89 percent. The benchmark 5/1 adjustable-rate mortgage fell 21 basis points, to 5.51 percent. At 5.28 percent, the benchmark 30-year rate ties its record low in the Bankrate survey's 23-year history. It was 5.28 percent June 11, 2003. Source: Bankrate.com