2013 turned out to be a rather healthy real estate market. At least according to the numbers released today by the National Association of Realtors (1). As the year closed out, the sale of existing homes hit a level not seen in seven years. In 2013 the report said, there were 5.09 million existing homeshome sales increase sold which was more than 9.00 percent higher than the previous year and up almost 20 percent since 2011.

That’s a significant increase and a good sign that the housing market has done well in gaining solid ground. The median price for an existing home also rose more than 11 percent compared to 2012 to $197,100 from $176,800, and the largest increase since 2005 when median prices rose 12.4 percent. Shortly after that increase, home values began their dramatic free fall.

The National Association of Realtors also pointed out that while the pace of home sales slowed toward the end of 2013 it was still a very good year with cities around the country posting solid gains. Part of the rise is due to the extended period of low interest rates. One year ago in January 2013, 30 year mortgages rates were right around 3.40 percent and after hitting a high of just under 4.50, rates have been in that range for nearly three years.

As home values continued their price increases, values have gone increased on a month to month basis for two years straight, consumers jumped back into the home buying market feeling better about future values while at the same time somewhat fearful that interest rates would soon be on the rise as signs of economic recovery are starting to appear.

For 2014, a similar increase in home sales may not be in the works if rates move closer to the 5.00 percent level and incomes remain stagnant. For real estate investors, that’s good news as rates should still be relatively low, home values moderate and rental demand continues to look good for the coming year.

  1. http://tinyurl.com/locuovu