Existing-home sales were at a seasonally-adjusted annual rate of 6.76 million in December, an increase of 07.% compared with November and up 22.2% compared with December 2019, according to the National Association of Realtors (NAR).
It was the highest annual rate for existing-home sale since 2006, NAR says.
Regionally, and on a month-over-month basis, existing-home sales were up 4.5% in the Northeast, up 1.1% in the South, flat in the Midwest, and down 1.43% in the West.
Year over year, all four regions saw double-digit increases.
“Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic,” says Lawrence Yun, chief economist for NAR, in a statement. “What’s even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market.”
Yun predicts a continuation of the strong activity that’s currently taking place in the housing market and in the overall economy.
“Although mortgage rates are projected to increase, they will continue to hover near record lows at around three percent,” Yun says. “Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway.”
Stifling home sales, however, are lack of inventory and rising home prices. The median existing-home price for all housing types in December was $309,800, up 12.9% from $274,500 in December 2019.
Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago.
That’s a 1.9-month supply at the current sales pace – and an all-time low.
Properties typically remained on the market for 21 days in December, seasonally even with November and down from 41 days in December 2019.
Seventy percent of the homes sold in December 2020 were on the market for less than a month.
“To their credit, homebuilders and construction companies have increased efforts to build, with housing starts hitting an annual rate of near 1.7 million in December, with more focus on single-family homes,” Yun says. “However, it will take vigorous new home construction in 2021 and in 2022 to adequately furnish the market to properly meet the demand.”
“NAR will work with the incoming Biden administration in pursuit of policies promoting housing affordability and accessibility,” adds Charlie Oppler, president of NAR. “We were pleased with the homebuyer tax credit President Biden proposed as a candidate and we look forward to continuing our work with Congress and the White House. We will aim to find common ground, especially related to ways of boosting home supply and working toward solutions that will protect and support homeownership and America’s broader real estate industry.”
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