Existing Home Sales See Highest Mark Since 2006

Recent sales trends are mirroring our last significant peak

According to a recent release from the National Association of Realtors (NAR), despite the total number of existing home sales having dropped during the month of December breaking a 3 month streak of gains, overall sales for the year were up.

Even though each of the four major regions in the United States experienced a dip in sales at the end of the year, the total number of sales for all of 2021 had increased by 8.5%. 

"December saw sales retreat, but the pull back was more a sign of supply constraints than an indication of a weakened demand for housing," said Lawrence Yun, NAR's chief economist. "Sales for the entire year finished strong, reaching the highest annual level since 2006."

Sales Projection

Yun does expect that the number of home sales may slow a bit with mortgage rate hikes. He anticipates that rates will stay under 4% this year with wages holding as we have a tight labor market. 

"This year, consumers should prepare to endure some increases in mortgage rates," Yun cautioned. "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."

Housing Inventory Levels

Total housing inventory was down at the end of 2021 as compared to the month before and to the same time last year. Available inventory rests at a 1.8 month supply at the current sales pace which is down from the month prior and last year at this time. 

Home Values

Home prices continue to increase with the median existing-home price for all property types up 15.8% at the end of the year over that of 2020. This made for the 118th straight month for year-over-year gains which was the longest stretch on record.

Number of Days on Market

Homes were on the market available for sale for 19 days for the month of December which was 2 fewer days than that of 2020. We also saw the majority of the homes at 79% of them being on the market for less than one month.