Existing-home sales slide in December while prices continue to climb

by John Yellig

Existing-home sales declined in December after three months of increases, while the median sales price rose, marking 118 consecutive months of gains, the longest streak on record, the National Association of Realtors said.  

Total existing-home sales, which are completed transactions, including single-family homes, townhomes, condominiums and co-ops, fell 4.6% from November to a seasonally adjusted annual rate of 6.18 million in December. Year over year, sales were down 7.1% from 6.65 million transactions in December 2020.  

The median existing-home price for all housing types in December was $358,000, up 15.8% from December 2020, as prices rose in each region, the NAR said in a press release.  

Total housing inventory at the end of last month stood at 910,000 units, down 18% from November and down 14.2% from a year earlier. December’s unsold inventory represented a 1.8-month supply at the current sales pace, down from 2.1 months in November and 1.9 months a year ago.

“December saw sales retreat, but the pull back was more a sign of supply constraints than an indication of a weakened demand for housing,” NAR chief economist Lawrence Yun said in the release. “Sales for the entire year finished strong, reaching the highest annual level since 2006.”

Yun expects existing-home sales to slow slightly in coming months as mortgage rates continue to rise. He added that recent employment gains and stricter underwriting standards mean home sales are in no danger of crashing. 

Properties typically remained on the market for 19 days in December, up one day from November and down from 21 days in December 2020. Seventy-nine percent of homes sold in December were on the market for less than a month.

By property type, single-family home sales slid to a seasonally adjusted annual rate of 5.52 million, down 4.3% from 5.77 million in November and down 6.8% from a year earlier. The median existing single-family home price was $364,300, up 16.1% on a year-over-year basis.   

Existing condominium and co-op sales came in at a seasonally adjusted annual rate of 660,000 units, down 7% from 710,000 in the previous month and down 9.6% compared to November 2020. The median existing condo price rose 11.9% year over year to $305,100. 

“We wrapped up the year witnessing home sales exceed the previous year’s total and saw millions of families secure housing,” NAR President Leslie Rouda Smith said. “I think the positive momentum will continue as the market prepares to finally see more supply in the coming months, meaning more buyers will be able to land their dream home.”

In December, first-time buyers were responsible for 30% of sales, up from 26% in November and down from 31% in December 2020, while individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes, up from 15% in November and 14% in November 2020.

By major U.S. region, sales of existing homes dropped 6.8% in the West, 6.3% in the South and 1.3% in both the Midwest and Northeast.

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