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The National Association of Realtors, which last month said it had overstated sales data from 2007 onwards lower by 14%, said December sales rose to a seasonally adjusted annual rate of 4.61 million. November sales were revised down to 4.39 million, from an initially reported 4.42 million.
Lawrence Yun, the NAR’s chief economist, said lower mortgage rates, improved jobs conditions and rising rents have helped lift sales figures, though he noted that December 2010 also was strong before petering out later.
For all of 2011, sales edged up 1.7% to 4.26 million — compared to the 2005 peak of 7.08 million. Median sales prices in December fell 2.5% from the same period of 2010 to $164,500.
For the year, median prices were $166,100, down 3.9% to return back to 2002 levels. 
Inventories — generally low in the winter months — fell 9.2% to 2.38 million, the lowest since March 2005, which represents 6.2 months of supply. The months of supply of inventory were the lowest inventory since April 2006.
Distressed sales accounted for 32% of sales, up from 29% in November.

A poll of 23 economists and analysts found a consensus for no change in the S&P/Case-Shiller home price index in 2012, compared with a median 0.3% decline that was forecast in the last poll in November.  Many say that a recovery in the housing market is a key requirement for any vigorous rebound in the world's largest economy. The spectacular collapse in US housing, which sent average prices plummeting by a third, was the trigger for the 2008-09 financial crisis and subsequent recession.  The meager 1.5% gain expected in 2013 will offer little comfort to the millions of Americans trapped in negative equity — owing more to their mortgage lender, and in some cases much more, than their houses are worth.  "I think we are seeing stabilization, but unfortunately it's stability at the bottom," said Lindsey Piegza, economist at FTN Financial, describing the grinding halt to several years of relentless price declines.  The average price of a US home is currently around where it was nine years ago, and the most recent data, from October, showed price declines still accelerating.

The market is still under pressure from an excess of homes up for sale. Fifteen of 20 respondents said monthly foreclosures should subside this year, while five didn't see any let-up until 2013. Among 20 respondents, 15 said they expect foreclosures to ease some time this year, while five said it would not happen until 2013.  Gains in home sales and new home construction in November, and recent improvement in homebuilder sentiment, added only a touch of optimism at the end of last year.  Still, while the gain expected over the next two years is tiny compared with the more than 30% plunge from the peak in 2006, it is still a more cheery outlook than in some other parts of the world.  A recent Reuters poll predicted British home prices, which have not dropped anywhere near as far as they have in the US, will slip 1.7% this year. In China, they are expected to fall 10 to 20%.

Real estate website Zillow.com on Tuesday released a report that shows South Florida home values were flat in November. Zillow’s Home Value Index for Palm Beach, Broward and Miami-Dade counties was $137,000 – up 0.1% from October. Values here have been flat or positive for seven of the past nine months. Prior to that, though, values had declined in 66 of the previous 67 months.  Zillow said home values in South Florida have fallen about 4% from a year ago and 55% from the 2006 peak. Zillow's report comes a day after a mostly encouraging forecast from the Clear Capital research firm.  Stan Humphries, chief economist for Zillow, said in a statement that supply and demand are still out of whack in many markets, and more foreclosures in 2012 are expected to hurt home values.  “Even with the anticipated increase in foreclosures, look for 2012 to be a
transitional year in which home values fall modestly followed by a prolonged period of flat home values,” he said. “We’re still three to five years away from ‘normal’ housing market conditions.”

 Mortgage rates should remain low in 2012, especially in the first half of the year, according to the predictions of several industry watchers.

“We may spend the entire year below 5%,” said Greg McBride, senior financial analyst for Bankrate.com, referring to the average interest rate for a 30-year fixed-rate mortgage.

Rates may even fall to new lows early this year, particularly if the European debt crisis hits a crescendo, McBride added.

Already, rates are sitting at record lows. The 30-year fixed-rate mortgage averaged 3.91% for the week ending Jan. 5, according to Freddie Mac’s weekly survey of conforming mortgage rates. That ties the record for the lowest rates have been in the history of the survey. In contrast, the highest average for the mortgage was 18.63%, set during the week ending Oct. 9, 1981, according to Freddie Mac. 

In general, the financial troubles in Europe, combined with the Federal Reserve’s pledge to keep short-term rates on hold at least through 2013, will keep mortgage rates from rising significantly, McBride said.

Europe’s woes have caused a “flight to quality” among investors, sending their money in the direction of U.S. bonds, which has the effect of lowering mortgage rates. The Fed’s short-term rate policy also reduces long-term rates, since long-term rates “reflect expectations of where short-term rates will be in the future,” he said.

Lately, consumers have been conditioned to expect low rates. Last year, the 30-year fixed-rate conforming mortgage had its lowest annual average on record at 4.66%, according to Bankrate.

According to Freddie Mac, the 30-year mortgage averaged 4.5% in 2011, with the mortgage posting the lowest weekly rates on record toward the end of the year.

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