New Home SalesCENSUS
368K
U.S. Housing Market · 2012
U.S. Housing Market in 2012
Existing SalesNAR
4.66M
Median PriceNAR
$176,800
30Y MortgagePMMS
3.66%
In 2012, the U.S. housing market recorded existing-home sales averaged 4.66 million, new-construction sales of 368K, and a 30-year fixed mortgage rate of 3.66%.
Existing-home sales rose 9.4% from 2011. the median existing-home price rose 6.4% to $176,800. the 30-year fixed mortgage fell 0.79 percentage points to 3.66%.
By the numbers — 2012: new-home sales 368K, existing-home sales 4.66M, median existing price $176,800, 30-year mortgage rate 3.66%.
Macroeconomic Context
Nineteen ninety-two began an unmistakable housing recovery, though it arrived quietly and was widely doubted well into the year. GDP grew approximately 2.2 percent — still below what economists consider a full-speed recovery — and unemployment averaged 8.1 percent as the labor market healed only gradually. Consumer price inflation eased to about 2.1 percent. The Federal Reserve held the federal funds rate at zero and in September launched QE3, an open-ended program of $85 billion in monthly asset purchases that would continue until the labor market substantially improved.
With the federal funds rate at zero and the Fed actively buying MBS, the 30-year fixed mortgage rate averaged approximately 3.7 percent for the year — the lowest annual average since Freddie Mac began its survey in 1971. At those rates, home ownership was cheaper on a monthly payment basis than at virtually any prior time in the survey's history, even as prices were beginning to rise. Investors, recognizing the opportunity, began purchasing single-family homes at scale in distressed markets. Institutional landlords — a new category of participant in the housing market — absorbed significant portions of the foreclosure inventory in Phoenix, Atlanta, Las Vegas, and other markets that had seen the deepest price declines.
The S&P/Case-Shiller National Home Price Index turned positive on a year-over-year basis in 2012 for the first time since 2006. The "Fiscal Cliff" — a package of automatic tax increases and spending cuts scheduled for January 1, 2013 — dominated year-end political debate, creating uncertainty that briefly dampened consumer confidence before a last-minute congressional deal averted the most severe provisions.