Existing-home sales reach their highest level since 2006
December’s total existing-home sales inched up 0.7% from November to a seasonally adjusted annual rate of 6.76 million—22.2% higher than last year. Existing-home sales reached 5.64 million in 2020, hitting the highest level since 2006.
“Home sales rose in December, and for 2020 as a whole we saw sales perform at their highest levels since 2006, despite the pandemic,” says Lawrence Yun, National Association of Realtors® (NAR’s) chief economist. “What’s even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market.”
Yun is not only hopeful for continued growth in the housing market, but also for improved economic conditions overall. “Although mortgage rates are projected to increase, they will continue to hover near record lows at around 3%,” says Yun. “Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway.”
Home prices up, inventory down
December 2020 also marked the 106th consecutive month of year-over year gains, as the median existing-home price was up 12.9% from last year. Meanwhile, inventory totaled 1.07 million units in December—down 16.4% from last month and 23% from last year.
In December 2020, properties remained on the market for an average of 21 days, as compared to 41 days in December 2019, with 70% of homes sold on the market for less than a month.
“To their credit, homebuilders and construction companies have increased efforts to build, with housing starts hitting an annual rate of near 1.7 million in December, with more focus on single-family homes,” says Yun. “However, it will take vigorous new construction in 2021 and in 2022 to adequately furnish the market to properly meet the demand.”
Supporting homeownership in the coming months
NAR President Charlie Oppler speaks to boosting supply, supporting homeownership and the real estate industry as a whole. “NAR will work with the incoming Biden administration in pursuit of policies promoting housing affordability and accessibility,” says Oppler. “We were pleased with the homebuyer tax credit President Biden proposed as a candidate and we look forward to continuing our work with Congress and the White House. We will aim to find common ground, especially related to ways of boosting home supply and working toward solutions that will protect and support homeownership and America’s broader real estate industry.”
Double-digit growth across the regions
While month-over-month numbers for existing-home sales varied, all four major regions experienced double-digit growth from last year in both existing-home sales and median home prices.
- Northeast: Up 4.5% to an annual rate of 930,000—27.4% higher than last year
- Midwest: Unchanged at an annual rate of 1,590,000—26.2% higher than last year
- South: Up 1.1% to an annual rate of 2,860, 000—20.7% higher than last year
- West: Down 1.4% to an annual rate of 1,380,000—17.9% higher than last year
Median home prices:
- Northeast: $362,100—19.0% higher than last year
- Midwest: $235,700—13.7% higher than last year
- South: $268,100—11.3% higher than last year
- West: $467,900—14.2% higher than last year