The rate on the 30-year fixed mortgage averaged 3.66 percent in 2012, the lowest annual average in 65 years, according to Freddie Mac.
Sales are rising faster for more-expensive homes, the Realtors' group said. Sales of homes priced $1 million or more surged 62 percent in 2012, while sales of homes below $100,000 fell 17 percent.
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 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 ½ 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.