The National Association of Realtors said Tuesday that sales reached 4.65 million last year. That's up 9.2 percent from 2011 and the most since 2007. Sales are still below the roughly 5.5 million that are consistent with a healthy market.
Sales dipped in December to a pace of 4.94 million, down from 4.99 million in November. November's figure was revised lower, but was still the highest in three years.
The supply of available homes is shrinking as sales rise. That's pushing up prices. The inventory of homes for sale dropped to 1.82 million in December, the lowest in 12 years.
Still, the housing market is recovering and most analysts expect that should continue this year.
Steady hiring, record-low mortgage rates and a tight supply of new and previously occupied homes available for sale have helped boost sales and prices in most markets.
A measure of U.S. home prices rose 7.4 percent annually in November, real estate data provider CoreLogic said last week.That's the biggest annual increase since 2006, when the housing bubble began to burst. CoreLogic forecasts that home prices will rise 6 percent nationally this year.
Rising demand for homes has persuaded builders to step up construction, which adds to economic growth and hiring.
U.S. builders started work on homes in December at the fastest pace in 4 years, the government said last week. And builders finished 2012 as their best year for residential construction since the early stages of the housing crisis.
The gains in home building helped boost construction hiring in December by 30,000 jobs the most in 15 months.
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