US home sales rebounded at the end of 2014, rising in December for the third month in a row.

New figures from the National Association of Realtors show that December property sales rose 2.4 per cent in December 2014 compared to November 2014, taking sales to 3.5 per cent above the same month one year earlier.

Transactions climbed to a seasonally adjusted annual rate of 5.04 million, the sixth time in seven months that sales have been above an annual pace of 5 million.

On a calendar basis, though, 2014 saw property sales fall slightly from 2013, as the market moderated after a year of booming recovery. Sales totalled 4.93 per million sales, 3.1 per cent down year-on-year.

Lawrence Yun, NAR chief economist, says sales accelerated in the second half of the year:"Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated. Sales were measurably better in the second half – up 8 percent compared to the first six months of the year."

The rise in deals caused inventory to reduce by 11.1 per cent, which helped to drive house prices up. Indeed, the median value of existing homes climbed 6 per cent year-on-year to $209,500, the 34th month in a row of year-on-year price rises.

Across the whole of 2014, the median price climbed 5.8 per cent year-on-year to $208,500, the highest level since 2007. Falling affordability is proving an obstacle for first-time buyers, with their share of sales falling from 31 per cent in November 2014 to 29 per cent. Nonetheless, they remain higher than December 2013's 27 per cent, as financial conditions have broadly encouraged the return of domestic buyers in the past year. 

"Housing costs – both rents and home prices – continue to outpace wages and are burdensome for potential buyers trying to save for a downpayment while looking for available homes in their price range," notes Yun.

Mortgage rates, though, remain at affordable lows, with Freddie Mac reporting that the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 3.86 per cent in December, its lowest level since May 2013.

The Federal Housing Administration is also lowering annual mortgage insurance premiums as of this week, which the NAR forecasts will support first-time buyers.

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