December Existing Home Sales Key Takeaways: Mid-Winter Blues
- Existing home sales failed to beat expectations for the first time since the summer, falling 2.8 percent to 5.49 million units at a seasonally-adjusted annual rate (SAAR).
- Despite easing slightly in December, inventory remains at historic lows, particularly after controlling for population growth.
- The median price of existing homes sold in December edged down from November, but was still 3.9 percent higher than a year earlier.
After seeming to defy gravity over much of the fall – consistently beating expectations despite ever-tightening for-sale inventory and rising mortgage rates – existing home sales seemed to come part of the way back down to earth in December. According to the National Association of Realtors, existing home sales fell 2.8 percent to 5.49 million units at a seasonally adjusted annual rate (SAAR) in December (figure 1). They remain 0.7 percent higher than in December 2015, the weakest year-over-year gain since August.
November home sales were revised upward from 5.61 million units (SAAR) to 5.65 million units, increasing the percent change from October from 0.7 percent to 1.4 percent.
Historically tight inventory continues to weigh on the housing market. For-sale inventory increased 0.9 percent in December to 1.67 million units (SAAR), but remains 5.6 percent below its December 2015 level and – except for November and August 2016, January 2001, and March 2000 – below where it has been at any point since July 1995. Scaled by the number of households, the inventory situation appears even more dire: In December there were 13.9 homes on the market for every 1,000 households. The previous record low was 14.9 homes on the market for every 1,000 households, reported in March 2000, on the eve of the dotcom bubble burst, and the historical average is 21.7 homes on the market for every 1,000 households.
The median seasonally adjusted price of existing single-family homes (SFRs) sold in December was $238,500, 1.1 percent below the median price of existing SFRs sold in November but 4 percent above its pre-crisis peak of $229,400 reported in October 2005. The median seasonally adjusted price of existing condos/coops sold in December, by contrast, was $225,800, 0.3 percent above the median sale price of condos/coops sold in November but still 3.5 percent below its pre-crisis peak of $234,000, also reported in October 2005.