U.S. existing home sales rise in December

U.S. existing home sales rose 3.6 percent sequentially to 5.54 million units annualized in December, the highest level since February 2018. Today’s rise follows a 1.7 percent fall seen in November. Both single-family home and condo sales rose. Condos recorded a rise of 10.7 percent in December, after coming in flat in recent months. Single family home sales rose 2.7 percent sequentially and 10.6 percent year-on-year.

Region wise, sales rose in all regions except the Midwest. Both the West and South saw recovery from declines in November, rising 4.6 percent and 5.4 percent, respectively. Meanwhile, the Northeast recorded a rise of 5.7 percent. Sales dropped 1.5 percent in the Midwest, but are still up 14.5 percent year-on-year.

Markey supply continued to be tight in December, with the month’s supply of homes dropping to 3 from 3.7 in November. Tight market conditions pushed prices higher, with the median existing home price rising 7.8 percent year-on-year.

Data released in December are in line with a resurgent housing market in the wake of the earlier fall in mortgage rates. Nevertheless, the degree of the rise was possibly aided by unseasonably warm temperatures in most the nation in December, and there might be some resulting softness in the months ahead, said TD Economics in a research report.

“The National Association of Realtors noted that according to Freddie Mac, the average 30-year conventional mortgage rate actually increased slightly in December to 3.72 percent, suggesting the boost from lower rates will eventually run out of steam. However, that mortgage rate has averaged a historically low 4 percent over the past five years, so rates are likely to remain favorable for buyers for some time yet, supporting housing and housing-related consumer spending”, added TD Economics.