New Home SalesCENSUS
429K
U.S. Housing Market · 2013
U.S. Housing Market in 2013
Existing SalesNAR
5.09M
Median PriceNAR
$197,100
30Y MortgagePMMS
3.98%
In 2013, the U.S. housing market recorded existing-home sales averaged 5.09 million, new-construction sales of 429K, and a 30-year fixed mortgage rate of 3.98%.
Existing-home sales rose 9.2% from 2012. the median existing-home price rose 11.5% to $197,100. the 30-year fixed mortgage rose 0.32 percentage points to 3.98%.
By the numbers — 2013: new-home sales 429K, existing-home sales 5.09M, median existing price $197,100, 30-year mortgage rate 3.98%.
Macroeconomic Context
The housing recovery of 2013 was nearly derailed in May by a single speech. When Federal Reserve Chairman Ben Bernanke suggested before Congress that the Fed might begin "tapering" — gradually reducing — its $85 billion monthly bond purchases, markets reacted with surprising violence. The 10-year Treasury yield jumped roughly 100 basis points between May and September, and mortgage rates surged from approximately 3.5 percent to nearly 4.6 percent in a matter of months. Refinancing volume collapsed. Purchase application volumes dipped. The episode, dubbed the "Taper Tantrum," illustrated how dependent the recovery had become on artificially low rates — and what normalization might look like.
Despite the rate shock, the broader economy performed reasonably well. GDP grew roughly 1.8 percent, a figure depressed by the sequestration budget cuts that took effect in March — the automatic spending reductions that were the residue of the 2011 debt-ceiling deal. Unemployment continued its gradual descent, ending the year near 6.7 percent. Consumer price inflation was muted at approximately 1.5 percent, well below the Fed's 2 percent target.
Housing fundamentals improved substantially even with the rate spike. Inventory remained historically tight, and sellers — many of whom had been underwater and unable to move — were finally emerging from negative equity as prices rose. The national Case-Shiller index rose roughly 13 percent during 2013, the fastest year of appreciation since the peak of the mid-2000s boom. The dynamic of rising prices combined with rising mortgage rates would define the affordability debate for years to come.