Existing-home sales snapped back solidly in December as more buyers reached the market before the end of the year, according to the National Association of Realtors®. Led by the South and West, all four major regions saw large increases in December.
Lawrence Yun, NAR chief economist, says December’s robust bounce back caps off the best year of existing sales (5.26 million) since 2006 (6.48 million). “While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015,” he said. “Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year.”
“Although some growth is expected, the housing market will struggle in 2016 to replicate last year’s 7 percent increase in sales,” adds Yun. “In addition to insufficient supply levels, the overall pace of sales this year will be constricted by tepid economic expansion, rising mortgage rates and decreasing demand for buying in oil-producing metro areas.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage stayed below 4 percent for the fifth consecutive month but increased in December to 3.96 from 3.94 percent in November. The average commitment rate for all of 2015 was 3.85 percent.
December existing-home sales in the Northeast increased 8.7 percent to an annual rate of 750,000, and are now 11.9 percent above a year ago. The median price in the Northeast was $255,700, which is 5.3 percent above December 2014.
In the Midwest, existing-home sales jumped 10.9 percent to an annual rate of 1.22 million in December, and are now 9.9 percent above December 2014. The median price in the Midwest was $171,000, up 7.5 percent from a year ago.
Existing-home sales in the South leaped 14.6 percent to an annual rate of 2.27 million in December, and are now 4.6 percent above December 2014. The median price in the South was $196,100, up 6.8 percent from a year ago.
Existing-home sales in the West catapulted 23.2 percent to an annual rate of 1.22 million in December, and are now 8.9 percent higher than a year ago. The median price in the West was $321,100, which is 8.2 percent above December 2014.