Existing Home Sales Jumped 14.7% in December

Washington, DC, January 22, 2016—Existing-home sales rose by 14.7% in December to a seasonally adjusted annual rate of 5.46 million from 4.76 million in November, as more buyers reached the market before the end of the year, and the delayed closings resulting from the rollout of the Know Before You Owe initiative pushed a portion of November's would-be transactions into last month's figure, according to the National Association of Realtors.

Led by the South and West, all four major regions saw large increases in December.

After last month's turnaround (the largest monthly increase ever recorded), sales are now 7.7% above a year ago.

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."

The median existing-home price for all housing types in December was $224,100, up 7.6% from December 2014 ($208,200). Last month's price increase marks the 46th consecutive month of year-over-year gains.

Total housing inventory at the end of December dropped 12.3% to 1.79 million existing homes available for sale, and is now 3.8% lower than a year ago (1.86 million). Unsold inventory is at a 3.9-month supply at the current sales pace, down from 5.1 months in November and the lowest since January 2005 (3.6 months).

"Although some growth is expected, the housing market will struggle in 2016 to replicate last year's 7% 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."

The percent share of first-time buyers was at 32% in December (matching the highest share since August), up from 30% in November and 29% a year ago. First-time buyers in all of 2015 represented an average of 30%, up from 29% in both 2014 and 2013. A separate NAR survey released in late 2015 revealed that the annual share of first-time buyers was at its lowest level in nearly three decades.