Sales of existing homes rose 0.7 percent in December, hitting a 6.76 million seasonally adjusted annual rate, the fourth consecutive month above the 6 million mark and the second-highest pace since March 2006 (see top of first chart). Sales are now up 22.2 percent from a year ago and 72.9 percent since the May low.
Sales in the market for existing single-family homes, which account for around 90 percent of total existing-home sales, rose 0.7 percent in December, coming in at a 6.03 million seasonally adjusted annual rate. From a year ago, sales are up 22.8 percent and up 68.9 percent from the May low. The December pace is the second-fastest since November 2005 (see top of first chart).
Condo and co-op sales posted a 1.4 percent rise for the month, leaving sales 17.7 percent above the December 2019 pace. Sales came in at a 730,000 pace for the month versus 720,000 in November.
Total inventory of existing homes for sale fell 16.4 percent to 1.07 million in December, pushing the months’ supply (inventory times 12 divided by the annual selling rate) to 1.9, a new low, from 2.3 in November.
For the single-family segment, inventory fell 17.6 percent to 890,000, the lowest on record since tracking began in the mid-1980s. The months’ supply also fell, to 1.8, also a new record low (see bottom of first chart), from 2.2 in November, while the condo and co-op inventory fell 11.4 percent to 178,000, putting months’ supply at 2.9 from 3.4 in the prior month.
The median sale price in December of an existing home was $309,800, 12.9 percent above the year ago price. For single-family existing home sales in December, the price was $314,300, a 13.5 percent rise over the past year, while the median price for a condo/co-op was $272,200, 6.9 percent above December 2019.
By region, total sales were up in two of the four regions in December: sales rose 1.1 percent in the South, the largest region by volume, leaving that region’s sales rate 20.7 percent above the year-ago pace, and sales were up 4.5 in the Northeast, putting them 27.4 percent above year-ago levels. Sales were off 1.4 percent in the West but are up 17.9 percent from the year-ago level and sales were unchanged for the month in the Midwest and are 26.2 percent above the December 2019 rate.
Sales for existing single-family homes posted gains in two regions and declines in two regions for December. Sales rose 1.2 percent in the South, leaving that region’s sales rate 20.7 percent above the year-ago pace, and sales were up 3.9 percent in the Northeast, leaving sales 29.5 percent above year-ago levels. Sales were down 0.8 percent in the West but are up 19.4 percent from the year-ago level while sales were off 0.7 percent for the month in the Midwest but are still 26.1 percent above the December 2019 rate.
Though unemployment remains high and the outlook for the labor market and the broader economy remains highly uncertain, near record-low mortgage rates and surging demand for housing are supporting a strong recovery for the housing market. Only time will tell if these conditions continue, but for now the housing market remains one of the brightest areas of the economy.