US Existing Home Sales Soar Near Fastest Rate In Two Years Amid “Dire Housing Shortage”

After tumbling to the lowest level since June, December existing home sales soared to their highest SAAR since Feb 2018

Existing home sales roise 3.6% MoM in December (rebounding from the 1.7% drop in November and well above the 1.5% jump expected).

At 5.54mm SAAR, this is the highest in almost 2 years.

Source: Bloomberg

The median sales price climbed 7.8% from a year earlier, the most since January 2016, to $274,500 as inventories declined for a seventh-straight month.

Total housing inventory at the end of December totaled 1.40 million units, down 14.6% from November and 8.5% from one year ago (1.53 million). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from the 3.7-month figure recorded in both November and December 2018. Unsold inventory totals have dropped for seven consecutive months from year-ago levels, taking a toll on home sales.

“America is facing a dire housing shortage condition,” Lawrence Yun, NAR’s chief economist, said at a briefing in Washington.

“We need to build more.”

Looking across 2019, existing-home sales grew at a 5.34 million pace, the same as 2018.

Three of four major regions saw gains from the prior month, led by a 5.7% rise in the Northeast. The Midwest posted a modest decline.

First-time buyers made up 31% of sales, down slightly from 32% the previous month.

As CNBC’s Diana Olick noted, soaring prices are creating fears that eventually, buyers will be “choked out of the market.”