Total existing-home sales – including sales of single family homes and condos – increased 4.3% in the fourth quarter compared with the third quarter of 2017, according to the National Association of Realtors (NAR).
As of the end of the fourth quarter, existing home sales were at a seasonally adjusted annual rate of 5.62 million – up from 5.39 million in the third quarter.
That’s 1.3% higher than the 5.55 million pace during the fourth quarter of 2016.
Regionally, total existing-home sales jumped 10.1% in the Northeast; 6.0% in the Midwest; 3.8% in the South; and 0.3% in the West, compared with the third quarter.
The increase in existing-home sales in the fourth quarter had the effect of pulling even more inventory out of the market, NAR says.
As of the end of the fourth quarter, there were 1.48 million existing homes available for sale, which was 10.3% below the 1.65 million homes for sale at the end of the fourth quarter of 2016.
That’s about a 3.5-month supply at the current sales pace.
Although the national family median income rose to $74,492 in the fourth quarter, overall affordability dropped due to the combination of rising mortgage rates and home prices.
“While tight supply is expected to keep home prices on an upward trajectory in most metro areas in 2018, both the uptick in mortgage rates and the impact of the new tax law on some high-cost markets could cause price growth to moderate nationally,” says Lawrence Yun, chief economist for NAR, in a statement. “In areas where home building has severely lagged job creation in recent years, it’s going to be a slow slog before there’s enough new construction to cool price appreciation to a pace that aligns more closely with incomes.”
The five most expensive housing markets in the fourth quarter were San Jose, Calif.; San Francisco-Oakland-Hayward, Calif.; Anaheim-Santa Ana-Irvine, Calif.; urban Honolulu, Hawaii; and San Diego-Carlsbad, Calif.
The five lowest-cost metro areas in the fourth quarter were Cumberland, Md.; Youngstown-Warren-Boardman, Ohio; Decatur, Ill.; Binghamton, N.Y.; and Wichita Falls, Texas.