Existing-home sales post best year since 2006

Sales of previously owned homes posted their best performance in more than a decade last year even with a drop in December.

Existing-home sales, which are completed transactions that include single-family homes and condominiums, hit 5.45 million sales last year, surpassing 2015’s 5.25 million, according to the National Association of Realtors.

{mosads}Sales reached their highest level since the 6.48 million in 2006, before the housing crash ravaged the sector.

In December, existing sales decreased 2.8 percent to a seasonally adjusted annual rate of 5.49 million, from 5.65 million in November.

“Solid job creation throughout 2016 and exceptionally low mortgage rates translated into a good year for the housing market,” said Lawrence Yun, NAR’s chief economist.

“However, higher mortgage rates and home prices combined with record low inventory levels stunted sales in much of the country in December,” Yun said.

The rate for a 30-year fixed-rate mortgage rose to 4.20 in December, the highest since April 2014 and up from 3.77 percent in November.

The median existing-home price for all housing types in December was $232,200, up 4 percent from December 2015.

Total housing inventory at the end of December dropped 10.8 percent to 1.65 million existing homes available for sale, which is the lowest level since NAR began tracking housing supply in 1999.

Inventory is 6.3 percent lower than a year ago (1.76 million), has fallen year-over-year for 19 straight months and is at a 3.6-month supply at the current sales pace.

“Given current population and economic growth trends, housing starts should be in the range of 1.5 million to 1.6 million completions and not stuck at recessionary levels,” Yun said.  

“More needs to be done to address the regulatory and cost burdens preventing builders from ramping up production.”

First-time buyers were 32 percent of sales in December, which is unchanged both from November and a year ago.

Sales fell or held steady across all four regions.

The Northeast saw a 6.2 percent drop, sales in the Midwest fell 3.8 percent, sales in the South were unchanged and sales the West fell 4.8 percent.