First, the good news: Sales of new homes came in at 481,000 units on an annualized rate for December. This was the best December since 2007. What's more, it appears builders were selling with little discounting. The median price of a new rose 2.2% to $298,100. Year over year, the median price is up 8.2%. At the current sales pace, 5.5-months worth of inventory is on market. Inventory below six months is considered normal.

Now for the not-so-good news: The struggles in the existing-home market continue. ThePending Home Sales Index decreased 3.7% to a 100.7 reading in December. Compared to December 2013, the index is actually up, but if we go back two years, it's flat. According to NAR chief economist, Lawrence Yun, prices and inventory are still an issue. The former is up, but the latter remains down.

Of course, there is the usual caveat: All markets are local, so national numbers frequently fail to capture local reality. It is interesting, though, that the new-home market at the national level is more fundamentally sound from a historical perspective than the existing home market. This suggests to us that the dearth of first-time buyers still weighs on the existing-home market.

Despite the mixed data, we still think 2015 will shape up positively for housing – new and existing. Rates are obviously favorable. In addition, the economy continues to grow and to create more jobs. Home prices also continue to rise, but at a more normalized rate. All these variables taken together point to more housing activity in 2015.

Information provided by Jessica Regan.

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