IE 11 is not supported. For an optimal experience visit our site on another browser.

Home sales edge upwards; best for 7 years

In this Thursday, Jan. 9, 2014, photo, a for sale sign hangs in front of a house in Mount Lebanon, Pa. The National Association of Realtors releases e...
House for sale in Mount Lebanon, Pa. The National Association of Realtors said existing home sales in December edged up to make 2013 the best overall year in the last seven.Gene J. Puskar / AP

Sales of existing homes rose slightly in December, as record low mortgage interest rates and pent-up demand helped push total sales last year to their highest in seven years.

The National Association of Realtors (NAR) said on Thursday that sales of previously owned homes rose 1 percent last month, to an annual rate of 4.87 million units. Total sales for 2013 were the strongest in seven years.

Economists polled by Reuters had expected home resales to rise to a 4.94 million-unit pace in December.

"For the year as a whole, it's a good recovery," NAR economist Lawrence Yun told reporters. "We lost some momentum toward the end of 2013."

Home resales have been hurt by a sharp rise in mortgage interest rates since the spring and price increases that have shut some home buyers out of the market.

But other recent indications of the sector's health have brightened as a steady rise in household formation from multi-decade lows props up demand and encourages builders to undertake new development projects.

Yun said two opposing forces are affecting the market: a mismatch of fast-rising prices coupled with weak income growth, which have combined to make home-buying less affordable for many Americans.

The median existing home price rose 9.9 percent in December to $198,000 from the same month in 2012.

Prices have risen mainly due to a shortage of properties on the market. The number of homes for sale remains relatively tight, and the inventory of unsold properties on the market dropped 9.3 from the prior month to 1.86 million.