Rise in U.S. Home Sales Signals Positive Trend - BMO Harris

CHICAGO, Jan. 24, 2012 /PRNewswire/ -- U.S. existing home sales rose 5 per cent in December 2011 from a year ago to 4.61 million units annualized. While slightly below expectations, the trend is still positive and could lead to more buyers coming off the sidelines, according to BMO Economics and Harris Private Bank.

"December's gain was the third rise in a row and is the highest number of sales since January of last year. It is now up 40 per cent from the lows hit in July 2010," said Doug Porter, Deputy Chief Economist, BMO Economics.

For all of 2011, sales climbed 2.5 per cent to 4.29 million units, fully erasing a drop of 3.4 per cent in 2010. Sales of single-family homes are up for the third straight month – hitting a 1 1/2-year high, and condos posted a sizeable gain, reaching an 8-month high.

The backlog of total existing homes as well as single-family units dropped around 10 per cent last month to their lowest levels since 2005.

"The combined effects of record low mortgage rates, near record high affordability, a more promising economic recovery, job creation, and low prices are beckoning homebuyers out of the woodwork," added Porter.

The share of homes bought by first-timers dropped to 31 per cent while repeat purchasers rose to 48 per cent.

Jack Ablin, Chief Investment Officer for Harris Private Bank, noted the increased activity may give the overall market a boost of confidence. "While some buyers may believe that better deals will be available for those that wait, stable prices and increased activity will go a long way to instil some urgency into buyers' psyche," he added.

"We are seeing some very encouraging signs in the housing sector and rising consumer confidence all of which is helping to drive this positive trend," said Randy Raup, Senior Vice President of Retail Lending.  "With interest rates at historic lows and housing prices appearing to be stabilizing, more consumers have been contacting our branches and mortgage loan officers to determine which of our various mortgage loan products best meet their financial and home ownership goals".

About BMO Harris Bank

Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through approximately 700 branches and approximately 1,350 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida.  BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S.  Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.

BMO Harris Bank is a trade name used by BMO Harris Bank N.A. Banking deposit and loan products and services are provided by BMO Harris Bank N.A. Member FDIC. Brokerage products are offered through Harris Investor Services, Inc. (HIS), a registered broker/dealer, member FINRA/SIPC, and SEC-registered investment advisor. Insurance products are offered through Harris Bancorp Insurance Services, Inc. (HBIS). Investment banking services are provided by BMO Capital Markets Corp. (BMOCMC) and BMO Capital Markets GKST, Inc. (GKST), a Municipal Bond Dealer and member FINRA and SIPC. Financial planning and investment advisory services are provided by Sullivan, Bruyette, Speros & Blayney, Inc. (Harris SBSB), an SEC registered investment advisor. Family Office Services are provided by Harris myCFO, Inc. Investment advisory services are offered by Harris myCFO Investment Advisory Services LLC (Harris myCFO), an SEC-registered investment advisor and wholly-owned subsidiary of Harris myCFO, Inc. Stoker Ostler Wealth Advisors (Stoker Ostler) is an SEC-registered investment advisor. Investment advisory services to institutional clients are provided by Harris Investment Management (HIM) or its wholly-owned subsidiary HIM Monegy (Monegy), SEC-registered investment advisors. Products offered by HIS, HBIS, BMOCM, Harris SBSB, Harris myCFO, Stoker Ostler, HIM, and Monegy, which are affiliated companies and wholly owned subsidiaries of BMO Financial Corp.,: Are not insured by the FDIC or any Federal Government Agency, not a deposit of or guaranteed by any Bank or Bank Affiliate, may lose value. The purchase of insurance or an annuity is not a condition to any bank loan or service. Not all products and services are offered in every state and/or location.

SOURCE BMO Harris Bank