Existing-home sales dropped 6.4 percent in December following two consecutive months of increases, to a seasonally adjusted annual rate of 4.99 million, according to the National Association of Realtors (NAR). This followed a 1.9 percent increase in November. Sales are 10.3 percent below the December 2017 level of 5.56 million.
Lawrence Yun, NAR’s chief economist, says current housing numbers are partly a result of higher interest rates during much of 2018. “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. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
The total housing inventory declined to 1.55 million homes available for sale but is up from 1.46 million a year ago. The median existing home price was $253,600, up 2.9 percent from December 2017 ($246,500). This marks the 82nd straight month of year-over-year gains.
Distressed sales were 2.0 percent of the total, unchanged from last month and down from 5 percent a year ago.
Read the NAR release.