Strong sales and tight inventory boost home prices

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Shortage of home listings in Western Montana

NAR: Median home price in October up 11.1 percent from a year ago

By Inman News, Monday, November 19, 2012.

Inman News®

A combination of rising sales and the lowest inventory in six years helped existing-home prices post annual gains for the eighth month in a row in October, the National Association of Realtors said today.

Sales of existing homes were up 2.1 percent from September to October and 10.9 percent from a year ago, to a seasonally adjusted annual rate of 4.79 million.

At $187,600, the national median price for all housing types including single-family homes, townhomes, condominiums and co-ops was up 11.1 percent from a year ago. The national median price last posted eight consecutive months of annual gains before the crash — from October 2005 to May 2006.

Also released today, a survey by the National Association of Home Builders showed builder confidence rose in November for the seventh month in a row to its highest point since May, 2006.

Rising home prices are boosting home equity, and NAR Chief Economist Lawrence Yun thinks the improvement could be even greater next year.

“Rising home prices have already resulted in a $760 billion growth in home equity during the past year,” Yun said in a statement. “Given that each percentage point of price appreciation translates into an additional $190 billion in home equity, we could see close to a $1 trillion gain next year.”

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