Key Takeaways from the December Existing Home Sales Report
- Existing home sales rose 2.4 percent in December from November and 3.5 percent year-over-year to 5.04 million units (SAAR).
- The median sales price of existing homes rose 2.1 percent month-over-month in December and 6.1 percent year-over-year to $214,300 (SAAR).
- Zillow expected a monthly increase of 2.3 percent to 5.04 million units (SAAR), while the consensus forecast was an increase of 3.0 percent.
Existing home sales in December reversed course from a surprising 5.8 percent monthly drop in November (revised from a 6.1 percent decline), according to the National Association of Realtors.
Existing sales rose 2.4 percent last month to 5.04 million units at a seasonally-adjusted annual rate (SAAR). The median sales price of existing homes rose 2.1 percent month-over-month in December and 6.1 percent over the year to $214,300 (SAAR).
Sales of existing homes finished the year up 3.5 percent from the December 2013 level of 4.87 million units (SAAR), despite inventory levels remaining below their April 2011 peak according to Zillow’s For-sale Inventory series. Zillow’s inventory series showed a 12.2 percent year-over-year increase. Even though inventory levels have remained flat over the last few months, home sales have improved year-over-year for the third straight month. Higher inventory for the year suggests an increase in the supply of homes for sale. However, since prices and sales also increased over the year, this suggests a strong increase in the demand for homes.
Zillow predicted existing home sales would rise 2.3 percent from November to 5.04 million units (SAAR). The consensus forecast was an increase of 3.0 percent. The combination of falling interest rates and slight improvements in mortgage credit availability were just enough to offset the effects of a rising homeowner vacancy rate and a drop in the homeownership rate during the third quarter.
