–Retransmitting Story Published 10:47 ET, ‘This year’ 4th Pararaph
–Total 2011 Sales 4.26 Million, +1.7% from 2010
–NAR: Consumer Confidence, Up Lately, Key to 2012

By Denny Gulino and Ian McKendry

WASHINGTON (MNI) – U.S. sales of existing single-family homes, town
homes, condominiums and cooperatives rose 5.0% in December to an annual
rate of 4.61 million, a “nice end to a tough year,” as positive factors
like additional jobs, higher rents and most important, improved consumer
confidence, hold the promise of the beginning of price stabilization
in 2012, the National Association of Realtors said Friday.

The December level was under the MNI survey expectation of 4.67
million but nevertheless “It’s a good finish to a very tough,
difficult, challenging four consecutive years,” NAR Chief Economist
Lawrence Yun told reporters.

November’s sales were revised downward slightly to 4.39 million.
December to December sales were up 3.6% and year over year sales were up
1.7%.

For this year, the NAR is forecasting 4.45 million sales and Yun
said the key will be if consumer confidence can keep improving.
Otherwise several factors have improved markedly from December 2010,
from the unemployment rate to what Yun said is an accelerating increase
in rents. One other positive factor, he said, is that although
cancellations of sales contracts are still a high at 33% in December,
that finally many of those cancelled contracts are being resubmitted and
being completed.

“Consumer confidence has turned around in the last couple of months
and we hope this confidence level is sustained,” Yun said.

“The Fed white paper, we agree with large part that the excessively
stringent underwriting standard and the Fed made a comment that perhaps
Fannie and Freddie given their nationalized role is not about maximizing
profits but about helping the broader economy and the housing market
recovery.”

“We have seen pending sales rise and the closings rising,” Yun
said, “so many of the cancellations, many of the people who are getting
canceled are entering the market and signing another contract so the
cancellation is not having an impact of lower sales.”

Sales were up in all four geographic regions in December, with the
largest increase 10.7% in the Northeast.

At December’s sales rate, the homes available for sale were only
2.38 million, the lowest since March 2005, amounting to 6.2 months of
supply, the fewest months since April 2006. December and January are
always the two lowest months for inventories, Yun said, but even a new
seasonally adjusted inventories series shows a still low 6.8 months of
supply.

Yun said the NAR, which has cultivated considerable lobbying clout
on Capitol Hill, is most behind the Federal Reserve’s housing White
Paper.

“The Fed made a comment that perhaps Fannie and Freddie, given
their nationalized role, is not about maximizing profits but about
helping the broader economy and the housing market recovery,” Yun said,
adding that is a view the NAR agrees with.

“So even if you see lower profit it may be better for the whole
country (for instance if Fannie and Freddie implemented mortgage
principal reductions) so we agree largely with the whole paper,” Yun
said.

“It is a good finish to a very tough year,” Yun said. “Hopefully
the factors that are associated with higher home sales are developing —
job creation, consumer confidence, rents increasing — so we are hopeful
2012 will be a genuine year for housing recovery and given the low
inventory situation we may begin to see price stabilization and even
modest price pickup in certain markets.”

The NAR reported that the December median home price was $164,500
which is 2.5% below 2010.

Late last year the NAR instituted a massive revision of four years
of sales numbers, decreasing the total more than 14% and now are using
Multiple Listing Service totals to compile their monthly report.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$$AG$,M$U$$$,MAUDS$]