FX.co ★ U.S. Existing Home Sales Jump Much More Than Expected In December

A report from the National Association of Realtors (NAR), published on Friday, indicated a significant rise in existing home sales across the United States in December, exceeding expectations. According to NAR, existing home sales increased by 2.2% to an annual rate of 4.24 million in December, following a 4.7% surge to 4.15 million in November. Economists had anticipated a 1.0% rise to an annual rate of 4.19 million.

This unexpected boost pushed existing home sales to their highest level since last February, when they reached an annual rate of 4.38 million. NAR Chief Economist Lawrence Yun noted, "Home sales in the final months of the year demonstrated solid recovery despite elevated mortgage rates. Typically, winter sales are softer compared to spring and summer, but momentum is increasing with year-over-year sales growth for the past three months."

Yun emphasized the significant appeal of homeownership, citing "job and wage gains, combined with increased inventory," as factors positively influencing the market. The report further revealed that housing inventory at December’s end was 1.15 million units, a 13.5% decrease from November's 1.33 million units but a 16.2% increase from the same month last year at 990,000 units.

The unsold inventory now accounts for 3.3 months of supply at the current sales pace, a drop from 3.8 months in November but an increase from 3.1 months in December 2022. Additionally, NAR reported that the median existing home price remained at $404,400 in December, unchanged from November but marking a 6.0% increase from $381,400 the previous year.

Yun attributed the elevated median home price partially to the superior performance of the upper-end market, noting, "Sales rose by 35% year-over-year for homes priced above $1 million, while sales fell for homes priced under $250,000."

Looking ahead, the Commerce Department is set to release a separate report on new home sales for December next Monday. Current expectations from economists suggest a 0.9% rise to an annual rate of 670,000, following a 5.9% increase to a rate of 664,000 in November.