U.S. existing home sales likely to have dropped in December, home prices to ease further

U.S. existing home sales data for the month of December is set to release tomorrow. According to a Wells Fargo research report, the existing home sales are expected to have dropped by 1.9 percent in the month after rising 1.9 percent in the prior months. Increased mortgage rates and poor weather have held back sales in November and December. This has kept several potential home buyers indoors.

Lack of affordable product has also hindered sales, while overall inventories continue to be comparatively low. Home prices are expected to ease further, as sales have softened considerably in parts of the country where home prices tend to be more expensive, including major markets along the West Coast and the most densely populated areas in the Northeast, said Wells Fargo. Inventories of higher-priced homes have increased and sellers are cutting their asking prices.

“We are looking for this to continue this year, as overall economic growth struggles and homeowners in higher tax states come to grips with the new tax law”, added Wells Fargo.

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