Existing-home sales in December increased to a seasonally-adjusted annual rate of 5.54 million, up 3.6% compared with November and up 10.8% compared with December 2018, according to the National Association of Realtors.
Regionally, and month-over-month, sales increased 5.7% in the Northeast, 5.4% in the South and 4.6% in the West, but dipped 1.5% in the Midwest, according to NAR’s data.
On a full-year basis, total existing-home sales ended 2019 at 5.34 million, the same level as 2018.
Lawrence Yun, chief economist for NAR, says home sales fluctuated a great deal last year.
“I view 2019 as a neutral year for housing in terms of sales,” Yun says in a satement. “Home sellers are positioned well, but prospective buyers aren’t as fortunate. Low inventory remains a problem, with first-time buyers affected the most.”
The median existing-home price for all housing types in December was $274,500, up 7.8% compared with $254,700 in December 2018.
It was the 94th straight month that home prices increased on a year-over-year gains.
“Price appreciation has rapidly accelerated, and areas that are relatively unaffordable or declining in affordability are starting to experience slower job growth,” Yun says. “The hope is for price appreciation to slow in line with wage growth, which is about three percent.”
As of the end of December, there were about 1.4 million existing homes available for sale – about a 3-month supply at the current sales pace.
That’s down 14.6% compared with November and down 8.5% compared with one year ago.
As of December, unsold inventory totals had dropped for seven consecutive months from year-ago levels, taking a toll on home sales.
Properties typically remained on the market for 41 days in December, seasonally up from 38 days in November, but down from 46 days in December 2018.
Forty-three percent of homes sold in December 2019 were on the market for less than a month.
First-time buyers accounted for 31% of sales in December, moderately down from the 32% seen in both November and in December 2018.
Yun says conditions for buying are favorable and will likely continue in 2020.
“We saw the year come to a close with the economy churning out 2.3 million jobs, mortgage rates below four percent and housing starts ramp up to 1.6 million on an annual basis,” he says. “If these factors are sustained in 2020, we will see a notable pickup in home sales in 2020.”
Low mortgage rates continue to help counter the low inventory rate.
According to NAR’s data, the average rate for a 30-year, conventional, fixed-rate mortgage in December was 3.72%, up from 3.70% in November.
The average commitment rate across all of 2019 was 3.94%.
“NAR is expecting 2020 to be a great year for housing,” says Vince Malta, president of NAR and a broker at Malta & Co., Inc., in San Francisco, Calif. “Our leadership team is hard at work to secure policies that will keep our housing market moving in the right direction, like promoting infrastructure reform, strengthening fair housing protections and ensuring mortgage capital remains available to responsible, mortgage-ready Americans.”