As I previewed, Existing home sales surprised upward in December but rebounded and came largely above my estimate. According to the National Association of Realtors (NAR), they increased by 0.7% MoM, reaching 6.76M (after dropping for the first time since May 2020).
The jump came despite housing inventory fell again in December. According to the report “Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019.”
In this context, “The median existing-home price for all housing types in December was $309,800, up 12.9% from December 2019 ($274,500), as prices increased in every region. December’s national price increase marks 106 straight months of year-over-year gains.”
For the full year, existing-home sales climbed to 5.64M, up from 5.34M in ethe prior year. The increase suggests low borrowing costs coupled with robust demand for larger spaces and second homes continue to underpin the rebound in home sales and indicate strong momentum for residential real estate in early 2021 despite pandemic.