According to a report released by the National Association of Realtors (NAR), after a few consecutive months of increases, existing home sales showed a dip for the month of December. All of the 4 major regions across the country saw a decline in sales which could be mortgage rate induced or could be normal as things often slow down for the holidays.
Total existing home sales for single families, condos and townhomes has slowed by 6.4% in December which is 10.3% lower than that of the year prior in 2017. Lawrence Yun, NAR chief economist shared that this activity may be due to a rise in mortgage interest rates during 2018.
“The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
Home Prices and Days on Market
For home prices, the median existing home price for December was up by 2.9% which is a steady gain for 82 months. Inventory levels were slightly lower from the month prior yet were higher than last year at this time. Properties were on the market for 46 days on average in December which was up from 40 from the month before.
“Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation,” says Yun. “But there is still a lack of adequate inventory on the lower-priced points and too many in upper-priced points.”
As the holidays finished off the year and with the recent government shutdown many markets may have had a continued slowdown as we enter 2019. However, as spring market is not all that far away, we will soon see just how much things will increase as they normally do in many areas for this big selling season.