Existing home sales in the United States fell, in December, by nearly 3 percent to reach an annual pace of 5.49 million. This is slightly higher than had been estimated in November and the highest level since 2006’s peak of 6.48 million, according to the National Association of Realtors. More importantly, though, December 2016’s numbers came in roughly 0.7 percent ahead of the same value from last year.
In summary, then, December’s numbers put a cap on the slight decline last month, ending this year stronger than any year since the peak of the boom (ten years ago).
Of course, this also means the momentum may be hard to keep up as we enter into a new year—and a new era for the United States.
According to National Association of Realtors chief economist, Lawrence Yun, “Solid job creation throughout 2016 and exceptionally low mortgage rates translated into a good year for the housing market. However, higher mortgage rates and home prices combined with record low inventory levels stunted sales in much of the country in December.”
Looking more closely at the numbers, median sale price rose about 4 percent in December, over last year, to a value of $232,200. When combined with more mortgage rates, affordability became a bit of a challenge for people looking to buy, last month.
In addition, though, mortgage rates jumped by 4.32 percent towards the end of last month, which is up from the 3.5 percent recorded in early November. This is according to mortgage company Freddie Mac, who also notes that mortgage rates have, since, fallen to 4.09 percent. Economists are optimistic that this will climb to roughly 4.5 percent this year.
Also, single-family sales fell just shy of 2 percent, hitting a seasonally adjusted annual rate of 4.88 million, last month, only slightly down from November’s 4.97 percent. Still, this is 1.5 percent more than the 4.81 million pace from the same time last year.
Yun goes on to say, “While a lack of listings and fast rising home prices was a headwind all year, the surge in rates since early November ultimately caught some prospective buyers off guard and dimmed their appetite or ability to buy a home as 2016 came to an end.”