The latest Existing Home Sales report, released by the National Association of Realtors, showed that existing home sales for the month of December declined by 4.6%, at an annualized pace of 6.18 million units. Despite this first decline in four months, overall sales for 2021 increased 8.5%.
This report measures the prices of “existing” single-family dwellings, condominiums, and Co-Ops across the U.S. When comparing December 2020 versus December 2021 there was actually a drop in sales by about 7.1%. 6.65 million units versus 6.12 million units.
Lawrence Yun, NAR’s chief economist said, “December saw sales retreat, but the pullback was more a sign of supply constraints than an indication of a weakened demand for housing,” and Lawrence continued with, “Sales for the entire year finished strong, reaching the highest annual level since 2006.”
Digging deeper into the report, we see that unsold inventory at the current sales pace is at a 1.8-month supply which is down from November’s 2.1 month supply and down from December 2020’s 1.9-month supply.
“We saw inventory numbers hit an all-time low in December,” Lawrence Yun said. “Homebuilders have already made strides in 2022 to increase supply, but reversing gaps like the ones we’ve seen recently will take years to correct.”
Further into the report, we saw that properties remained on the market for 19 days in December, a one-day increase from November’s report. Also, 79% of homes sold in December 2021 were on the market for less than one month.
First-time homebuyers increased to 30% of all sales up from 26% in November. Investors made up 17% of the sales and cash purchases made up 23% of transactions. The median existing single-family home price was $364,300 in December which is up 16.1% from December of 2020.
As you can see that inventory levels continue to run very tight and homebuyer demand isn’t letting up which is very supportive of home prices.
Source : https://bit.ly/3AFShhA
By: Jon Iacono