US home sales up slightly in December

A real estate sign hangs on a fence in front of a home in the Wicker Park neighborhood of Chicago, Illinois.
Scott Olson, Getty Images

WASHINGTON - Sales of existing U.S. homes edged up slightly in December, helping to lift sales for the year to the highest level in seven years. 

The National Association of Realtors says sales increased to an annual rate of 4.87 million units last month, up one percent from the November sales pace. However, both months represented a slower pace of sales than earlier in 2013, reflecting the drag from higher mortgage rates and higher home prices. 

For all of 2013, sales totaled 5.09 million, the best performance since 2006, when sales totaled 6.48 million. However, the sales gains in both 2005 and 2006 represented an unsustainable housing bubble. Analysts say a more normal sales pace currently would be around 5.5 million units.

Stuart Hoffman, Chief Economist at PNC Bank, said he expects the upward trend to continue. "Sales in 2014 will increase about three percent from 2013, as households that have put off purchasing a home become confident about the economy and their own financial situation."

One area of concern, Hoffman said, is the effect that new regulations could have on lenders being able to originate new mortgages. "If these regulations restrict the supply of credit, some households looking to purchase a home could find themselves shut out of the market, weighing on demand."