Sales of previously owned homes rose in December for the third straight month, bringing the supply of homes listed for sale to the lowest since 2006 and offering a glimmer of hope that the housing market could be starting to climb out of a profound downturn.
Existing-home sales increased 5% in December from a month earlier. Many economists had predicted that 2011 would be the worst year on record for existing home sales, but the year ended with 4.26 million sales, about 1.6% higher than the 4.19 million existing homes sold in 2010.
Home sales and home building are forecast to rise this year after sliding steeply the past five years in housing's worst downturn since the Great Depression. Investors are betting on the start of an upturn, bidding up home builder stocks and causing them to outperform the broader stock market.
Housings outlook is brightening with signs of a better economy. Last month, US employers added 200,000 jobs and the unemployment rate fell to 8.5%, lowest in nearly 3 years. While en economic shock could derail progress, there's now more evidence of improvement in the economy and housing will follow the economy, says David Crowe, Chief Economist at the National Association of Home Builders.
From USA Today and Wall Street Journal
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