Existing Home Sales Decline Month-Over-Month and Year-Over-Year in December

The National Association of Realtors® (NAR) reported on Thursday (1-20-22) that total existing home sales, which are completed transactions for single-family homes, townhomes, condominiums, and co-ops, declined -4.6% in December from November. Sales were at a seasonally adjusted rate at 6.18 million homes. Year-over-year sales are down -7.1% (6.65 million December 2020).

Each of the four major U.S. regions witnessed sales declines in December on both a month-over-month and a year-over-year basis. Despite the drop, overall sales for 2021 increased 8.5%.

At the end of December, unsold inventory was at a 1.8-month supply. At the current sales pace, this is down from 2.1 months November 2021 and down year-over-year from the December’s 2020 rate of 1.9 months.

The median existing home price for all housing types in December was $358,000 — up 15.8% from December 2020 ($309,200), as prices rose in each region. The South witnessed the highest pace of appreciation. This marks 118 straight months of year-over-year increases, the longest-running streak on record.

In a statement prepared to accompany the release of the December Existing Home Sales Report, Lawrence Yun, the NAR’s chief economist said, “December saw sales retreat, but the pullback was more a sign of supply constraints than an indication of a weakened demand for housing. Sales for the entire year finished strong, reaching the highest annual level since 2006.”

“This year, consumers should prepare to endure some increases in mortgage rates,” Yun added. “I also expect home prices to grow more moderately by 3% to 5% in 2022, and then similarly in 2023 as more supply reaches the market.”