The National Association of Realtors (NAR) reported Friday that existing-home sales rose 14.7 percent to a seasonally adjusted annual rate of 5.46 million in December, up from 4.46 million in November. Overall purchases slumped by 10.5% to just over a pace 4.76 million during November.
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Sales had previously plummeted as the industry adapted to new mortgage disclosure rules introduced in October.
“While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015”, he said.
Sales of existing single-family homes reached an annual rate of 4.82 million in December, a 16.1% increase from last month and a 7.1% increase from a year ago.
According to the NAR, the national median existing home price for all housing types in December was $224,100, up 7.6% compared with December 2014, the 46th consecutive month of rising home prices. Last month, the share of first-time buyers was 32 percent, up from 30 percent in November and the highest share since August.
December sales were up 7.7 percent from a year ago.
Total housing inventory fell by 12.3% to 1.79m at the end of December and was left standing 3.8% below the same level of a year ago (1.86m). And total sales in 2015 were the most in nine years. Unseasonably warm weather around the mid-Atlantic region also played a role in prolonging the traditional warm-weather home buying season.
“The strong price increases will begin to impact affordability, but they are clearly needed to entice sellers to list their homes for sale”, said Kristin Reynolds, a USA economist at IHS Global Insight in Lexington, Massachusetts. Meanwhile, unsold inventory is at a 3.9-month supply at the current sales pace, down from 5.1 months in November and the lowest since January 2005 (3.6 months).
FACTORY DATA SURPRISES While a separate report hinted at some stabilization for the downtrodden manufacturing sector, dollar strength and on-going efforts by businesses to reduce an inventory overhang suggest the sector’s troubles are far from over. Employers added a robust 2.7 million jobs previous year as the unemployment rate dropped to 5 percent from 5.7 percent.
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“First-time buyers were for the most part held back once again in 2015 by rising rents and home prices, competition from vacation and investment buyers and supply shortages”, Yun explained. With available homes in short supply, more would-be buyers are stuck renting. All-cash transactions made up about 24 percent of purchases.
