USA existing home sales fall as supply hits 17-year low
- Author: Darren Santiago Jan 25, 2017,
Jan 25, 2017, 11:00
"Importantly, and despite the slip in sales, the inventory of homes for sale fell to the lowest level in the 17 years for which data is available", Nationwide Chief Economist David Berson said.
In December, local counties that had both an increase in sales and prices included Lake County, with sales up 6.3 percent and the median price up 5 percent since December 2015, to $211,546; Kendall, with sales up 6.6 percent and the price up 1 percent to $201,000; and DeKalb, with sales up 3.2 percent and the price up 10.4 percent to $143,500. Low housing supplies continue to press on the market.
November's sales pace was revised up to 5.65 million units, which was the highest since February 2007, from the previously reported 5.61 million units.
Citing Freddie Mac, the NAR said the average commitment rate for 30-year, fixed-rate mortgages rose to 4.2 percent in December, from 3.8 percent in November. This marks the 58th consecutive month of year-over-year gains. This is still an increase of 0.7% from past year.
"The dip in housing sales is more a sign of the lack of homes to be bought than the desire to buy homes", said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
The supply of homes for sale fell for the 19 straight month to 3.6 months, a historically low number and down from 3.9 months in December 2015, NAR said.
In order to solve the inventory shortage, Yun says builders need to get to a level of about 1.5 million to 1.6 million housing completions per year.
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The result was below expectations, as analysts had forecast a rate of 5.6 million. Rising mortgage rates could, however, slow house price increases.
Condo sales also declined year-over-year in December, by 2.5 percent, as the median sale price increased 4.6 percent to $338,500.
Distressed sales, which include foreclosures and short sales, were at 7 percent - a 1 percentage point increase from November and a 1 percentage point drop from December 2015.
She also said less people are going to be able to qualify for a home as interest rates go up. The numbers for December come just days after a report revealed the most expensive cities in the world, where the median home price is almost a million and sometimes even more. The PHLX housing index.HGX was up 2.25 percent.
While the Realtors group is forecasting existing home sales increasing one percent this year to 5.52 million units, it expressed concerns over President Donald Trump's suspension last Saturday of a plan by the Obama administration to cut mortgage insurance premiums on federally insured home loans.
Sales activity dropped throughout most regions, falling in the Northeast, West and Midwest, whereas staying the same in the South.