Existing-Home Sales Drop as Supply Continues to Fall

Existing-home sales decreased 3.6% to a seasonally adjusted annual rate of 5.57 million in December, according to the National Association of Realtors (NAR). December was the first monthly decline since August. November’s pace was the strongest since December 2006. Sales finished the year 1.1% above 2016.

“Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said Lawrence Yun, NAR chief economist “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.”

The total housing inventory fell 11.4% to 1.5 million homes available for sale, 10.3% lower than last December and the 31st consecutive month of year-over-year decline. The median existing home price was $246,800, up 5.8% from December 2016 ($233,300). This marks the 70th straight month of year-over-year gains.

Distressed sales were 5% of the total, up 1% from last month but down 2% from a year ago. Four percent of sales were foreclosures, and 1% were short sales.

Read the NAR release.

About Stephen Newton

Stephen Newton is an economic research associate at ABA.
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