Tight inventory driving higher prices

Sales of previously owned homes fell slightly in December from the previous month, an industry group said, but the national median home price rose the most in seven years.

Sales fell 1.0% from November and were up 12.8% from December 2011, the National Assn. of Realtors said.

In total, the group estimated that 4.65 million homes sold last year, up 9.2% from 2011. It was the highest level since 2007.

“Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales,” the Realtors group’s chief economist, Lawrence Yun, said in a news release.

Housing inventory dropped 8.5% in December to reach 1.82 million homes available for sale. That represents a supply of just under 4½ months. Most economists consider six or seven months a healthy supply. Unsold inventory is now at its lowest level since January 2001.

Tight inventory and steep competition for homes drove the median home price up 11.5% from the same month a year earlier to hit $180,800.

By Alejandro Lazo / LA Times

January 22, 20138:00 a.m.