The National Association of Realtors said existing home sales in December jumped 12.3% from the previous month. The NAR recently reported a seasonally adjusted rate of 5.28 million units in December, compared to the upwardly revised figure of 4.70 million units in November. However, the December 2010 figures are 2.9% below the December 2009 figure of 5.44 million units. (Existing-home sales are completed transactions that include single-family homes, townhouses, condominiums and co-ops.)

This week, the average contract interest rate for the 30-fixed rate loan was 4.77%, down slightly from 4.78% last week. Meanwhile, the average rate for a 15-year mortgage saw a small increase, from 4.15% last week to 4.16% this week According to an Associated Press article, interest rates have risen half a percentage point over the past two months; during that time, investors sold off Treasury bonds, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.

The Mortgage Bankers Association said mortgage applications rose 5% this week, compared to the previous week. The MBA added that the refinance index rose 7.7% this week, the third straight week of increase in refinances, but the number of purchase applications fell by 1.9%.

Next to 2009, the year 2010 was the worst year for new home starts. The AP reported on Wednesday that builders broke ground on a total of 587,600 homes in 2010, compared to 554,000 housing starts in 2009. The 2010 figures mark the second worst year for new homes since 1959. In December, builders started work at a seasonally adjusted rate of 529,000, according to the Commerce Department. That is a 4.3% decrease from November.