The National Association of Realtors said Monday that sales of existing homes rose 6.5 percent to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November.
The results were better than expected. December’s sales had been forecasted to fall to a pace of 4.4 million units, according to Thomson Reuters.
Buyers were taking advantage of dramatically lower prices, especially in distressed markets like California, Florida and Nevada, where foreclosures have swamped the market.
The nationwide median sales price plunged to $175,400, down 15.3 percent from $207,000 a year ago. That was the lowest price since May 2003 and the biggest year-over-year drop on records going back to 1968.
“The economy just simply cannot recover as long as home prices continue to decline,” said Lawrence Yun, the trade group’s chief economist, who called on lawmakers to include tax credits for home buyers in the economic recovery package being considered by Congress.
For all of 2008, there were 4.9 million existing home sales, down more than 13 percent from a year earlier, and the lowest total since 1997.
And another encouraging sign — the number of unsold homes on the market in last month fell nearly 12 percent to 3.7 million. At the current sales pace, it would take 9.3 months to sell all the properties, down from 11.2 months in November.
In another economic report, a private research group says its monthly forecast of economic activity rose unexpectedly in December, mostly because the flood of federal bailouts increased the money supply.
The Conference Board’s monthly forecast of economic activity increased 0.3 percent in December. Economists surveyed by Thomson Reuters had expected a 0.3 percent decline.
The group’s index of leading economic indicators had fallen 0.4 percent in November and a revised 1.0 percent in October.
The index is designed to forecast economic activity in the next three to six months based on 10 economic components, including stock prices, building permits, average weekly manufacturing hours and initial claims for unemployment benefits.
With most components falling steeply, the Conference Board said unemployment could rise to 9 percent from 7.2 percent as the country remains in an intense recession through spring.
The Conference Board’s leading economic index is about 5.0 percent lower than its most recent peak in July 2007. In the last six months, a separate Conference Board index has seen its largest decline since 1980.
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