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Wednesday, January 22, 2020

Comments on December Existing Home Sales

by Calculated Risk on 1/22/2020 10:42:00 AM

Earlier: NAR: Existing-Home Sales Increased to 5.54 million in December

A few key points:

1) Existing home sales were up 10.8% year-over-year (YoY) in December. This was the sixth consecutive month with a YoY increase - following 16 consecutive months with a YoY decrease in sales.

2) Inventory is very low, and was down 8.5% year-over-year (YoY) in December.   Inventory always decreases sharply in December as people take their homes off the market for the holidays.   However, based on the data I've collected, this was the lowest level for inventory in at least three decades (the previous low was 1.43 million in December 1993).

Existing Home Sales YoY Click on graph for larger image.

3) Sales slumped at the end of 2018 and in January 2019 due to higher mortgage rates, the stock market selloff, and fears of an economic slowdown.

Then sales picked up in the second half of 2019 as interest rates declined.

Existing home sales in 2019 (5.344 million) finished the year essentially unchanged from 2018 (5.343 million).

Existing Home Sales NSAThe second graph shows existing home sales Not Seasonally Adjusted (NSA).

Sales NSA in December (434,000, red column) were the highest for December since 2016.

Overall this was a solid report.   The very low level of inventory will be something to watch in 2020.