WASHINGTON: US home resales rebounded in December, but continued low participation by first-time buyers in the market suggested the housing recovery would remain gradual for now.
The National Association of Realtors said on Friday existing home sales increased 2.4 percent to an annual rate of 5.04 million units last month. That was slightly below economists’ expectations for a 5.06-million-unit pace.
“The still-tight mortgage credit conditions and more challenging first-time homebuyer affordability that were revealed by the failure of home sales to continue recovering last year remain serious concerns as we head into 2015,” said Ted Wieseman, an economist at JPMorgan in New York.
First-time buyers made up 29 percent of transactions in December as well as for the year as a whole, well below the level needed to boost growth in the housing market.
For all of 2014, existing home sales fell 3.1 percent, the first annual drop in four years.
The housing market has struggled to maintain momentum since stagnating in the second half of 2013 following a run-up in mortgage rates.
At December’s sales pace it would take 4.4 months to clear all available houses from the market, down from 5.1 months in November and the lowest since January 2013.