Existing-home sales slide in December
Following two consecutive months of increases, existing-home sales fell 6.4% in December.
According to the National Association of Realtors (NAR), completed transactions that include single-family homes, townhomes, condominiums and co-ops declined to a seasonally adjusted rate of 4.99 million in December. Sales are now down 10.3% from a year ago and the rate of 5.56 million in December 2017.
Single-family existing-home sales sit at a seasonally adjusted annual rate of 4.45 million in December, down from 4.71 million in November, but is 10.1% below the 4.95 million sales pace from a year ago. The median existing single-family home price was $255,200 in December, up 2.9% from December 2017.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 540,000 units in December, down 12.9% from last month and down 11.5% from a year ago. The median existing condo price was $240,600 in December, which is up 2.3% from a year ago.
Higher interest rates have been given credit as a primary culprit behind the falloff.
“The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today,” said Lawrence Yun, NAR chief economist.
But with mortgage rates descending once more, a revival in home sales is expected as the market heads into spring, Yun said.
The median existing-home price for all housing types in December was $253,600, up 2.9% from December 2017 ($246,500). December’s price increase marks the 82nd-straight month of year-over-year gains.
Total housing inventory at the end of December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November, but represents an increase from 1.46 million a year ago. Unsold inventory is at a 3.7-month supply at the current sales pace, down from 3.9 last month and up from 3.2 months a year ago.
Properties typically stayed on the market for 46 days in December, up from 42 days in November and 40 days a year ago. About 39% percent of homes sold in December were on the market for less than a month.
“Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation,” says Yun. “But there is still a lack of adequate inventory on the lower-priced points and too many in upper-priced points.”
December existing-home sales in the Northeast decreased 6.8% to an annual rate of 690,000, 6.8% below a year ago. The median price in the Northeast was $283,400, which is up 8.2% from December 2017.
In the Midwest, existing-home sales fell 11.2% from last month to an annual rate of 1.19 million in December, down 10.5% overall from a year ago. The median price in the Midwest was $191,300, unchanged from last year.
Existing-home sales in the South dropped 5.4% to an annual rate of 2.09 million in December, down 8.7% from last year. The median price in the South was $224,300, up 2.5 percent from a year ago.
In the West, existing-home sales slipped 1.9% to an annual rate of 1.02 million in December, 15% below a year ago. The median price in the West was $374,400, up 0.2% from December 2017.
The NAR said the hottest metro areas in December were Chico, Calif.; Midland, Texas; Odessa, Texas; Columbus, Ohio; and Fort Wayne, Ind.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.64% in December from 4.87% in November. The average commitment rate for all of 2017 was 3.99%.
“The partial shutdown of the federal government has not had a significant effect on December closings, but the uncertainty of a shutdown has the potential to harm the market,” said NAR President John Smaby, a second-generation realtor from Edina, Minn. and broker at Edina Realty. “Once the government is fully reopened, I am hopeful that housing transactions will increase.”
First-time buyers were responsible for 32% of sales in December – down from a rate of 33% last month but the same as a year ago.
According to the National Association of Realtors (NAR), completed transactions that include single-family homes, townhomes, condominiums and co-ops declined to a seasonally adjusted rate of 4.99 million in December. Sales are now down 10.3% from a year ago and the rate of 5.56 million in December 2017.
Single-family existing-home sales sit at a seasonally adjusted annual rate of 4.45 million in December, down from 4.71 million in November, but is 10.1% below the 4.95 million sales pace from a year ago. The median existing single-family home price was $255,200 in December, up 2.9% from December 2017.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 540,000 units in December, down 12.9% from last month and down 11.5% from a year ago. The median existing condo price was $240,600 in December, which is up 2.3% from a year ago.
Higher interest rates have been given credit as a primary culprit behind the falloff.
“The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today,” said Lawrence Yun, NAR chief economist.
But with mortgage rates descending once more, a revival in home sales is expected as the market heads into spring, Yun said.
The median existing-home price for all housing types in December was $253,600, up 2.9% from December 2017 ($246,500). December’s price increase marks the 82nd-straight month of year-over-year gains.
Total housing inventory at the end of December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November, but represents an increase from 1.46 million a year ago. Unsold inventory is at a 3.7-month supply at the current sales pace, down from 3.9 last month and up from 3.2 months a year ago.
Properties typically stayed on the market for 46 days in December, up from 42 days in November and 40 days a year ago. About 39% percent of homes sold in December were on the market for less than a month.
“Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation,” says Yun. “But there is still a lack of adequate inventory on the lower-priced points and too many in upper-priced points.”
December existing-home sales in the Northeast decreased 6.8% to an annual rate of 690,000, 6.8% below a year ago. The median price in the Northeast was $283,400, which is up 8.2% from December 2017.
In the Midwest, existing-home sales fell 11.2% from last month to an annual rate of 1.19 million in December, down 10.5% overall from a year ago. The median price in the Midwest was $191,300, unchanged from last year.
Existing-home sales in the South dropped 5.4% to an annual rate of 2.09 million in December, down 8.7% from last year. The median price in the South was $224,300, up 2.5 percent from a year ago.
In the West, existing-home sales slipped 1.9% to an annual rate of 1.02 million in December, 15% below a year ago. The median price in the West was $374,400, up 0.2% from December 2017.
The NAR said the hottest metro areas in December were Chico, Calif.; Midland, Texas; Odessa, Texas; Columbus, Ohio; and Fort Wayne, Ind.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.64% in December from 4.87% in November. The average commitment rate for all of 2017 was 3.99%.
“The partial shutdown of the federal government has not had a significant effect on December closings, but the uncertainty of a shutdown has the potential to harm the market,” said NAR President John Smaby, a second-generation realtor from Edina, Minn. and broker at Edina Realty. “Once the government is fully reopened, I am hopeful that housing transactions will increase.”
First-time buyers were responsible for 32% of sales in December – down from a rate of 33% last month but the same as a year ago.