December figures raise new questions about the housing market

February 04th, 2013

Newly-released figures show that new home sales declined by 7.3 percent in December. This is an exception to what was otherwise a strong year for the housing market, and it raises some questions about what 2013 will bring. This new twist should send both would-be buyers and current homeowners back to re-work their figures in a loan calculator, as the December figures could signal good news for some and bad news for others.

A hiccup in the housing recovery?

From a big-picture point of view, 2012 was a strong year for the housing market. According to US Census Bureau figures released on January 25, 2013, new home sales in December of 2012 sold at an 8.8 percent faster rate than in December of 2011. For the year overall, 367,000 new homes were sold, up 19.9 percent from 2011's total of 306,000.

More good news for the housing market in 2012: The median price for new home sales was $243,600 last year, up 7.2 percent over 2011's figure of $227,200.

However, the fly in the ointment is that the pace of new home sales slowed in the last month of the year. That means 2013 starts out with an important question hanging over the housing market: Was December's slip just a temporary hiccup, or does it signal cooling in the housing recovery?

Check your local market

A cool-down in the housing market could be good for prospective home buyers, who may get a little extra time to get into the market. On the other hand, it could be bad news for people looking to refinance, if they were waiting for their home values to rebuild an equity cushion above their loan balances.

How this affects you depends not only on whether you are looking to buy or refinance, but also on where you live. New home sales are just one portion of the national housing market, and real estate trends vary greatly from one region to another. So, while national figures can help clue you in to new trends, it always pays to take a closer look at your local market.

One value of a mortgage calculator is that it allows you to quickly adjust to new information, helping you to act decisively. That's a necessity when the only constant in the real estate market is change.

Posted By :

Richard Barrington has earned the CFA designation and is a 20-year veteran of the financial industry, including having previously served for over a dozen years as a member of the Executive Committee of Manning & Napier Advisors, Inc. Richard has written extensively on investment and personal finance topics.

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