US home sales plummet with available properties at record high | Economic news

By CHRISTOPHER RUGABER, AP Business Writer

WASHINGTON (AP) — Sales of previously occupied homes fell in December for the first time in four months as many potential buyers were frustrated with the lack of available homes, which fell to the lowest level in more than two decades. .

Sales of existing homes fell 4.6% last month from November, to a seasonally adjusted annual rate of nearly 6.2 million, the National Association of Realtors said Thursday.

Demand for homes remains healthy, the group said, with median prices jumping nearly 16% from a year ago to $358,000. The houses sold on average in 19 days, a little more than in the summer but still quite fast. Yet the number of homes for sale fell to just 910,000 in December, the lowest since records began in 1999.

“It’s very difficult for sales to increase significantly when there’s just not much to buy,” said Kwame Donaldson, senior economist for real estate website Zillow. “Existing home sales came down to earth in December after a surprisingly strong fall. … This reversal can be attributed to a dramatic decrease in options for buyers.

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Inventory of homes for sale has fallen 40% from pre-pandemic levels, Donaldson said.

Even with the decline in December, it was a good year for home sales. Annual sales hit 6.1 million in 2021, according to the National Association of Realtors, up 8.5% from 2020 and the most since 2006, the peak of the housing bubble that collapsed the year next.

Sales soared after the pandemic shutdowns ended, and many Americans sought more space for indoor offices and online education. Healthy home buying was also fueled by strong job and income gains.

The upsurge in new omicron infections may have discouraged some people from putting their homes on the market and opening them up to heavy traffic, Donaldson said, driving inventory down.

With the Federal Reserve expected to raise interest rates as early as March, home sales are expected to decline this year, said Lawrence Yun, chief economist for realtors.

Mortgage rates began to rise sharply in late December after last month’s sales were mostly over. Expectations of higher borrowing costs likely pushed home purchases higher in the fall. The average rate for a 30-year fixed mortgage hit nearly 3.6% this week, the highest since March 2020 and up from 3.05% a month ago.

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