December 2019 Headline Existing Home Sales Significantly Improve Whilst Homes For Sale Drop To 21st Century Lows

The headline existing home sales improved relative to last month with the NAR stating "Conditions for buying are favorable and will likely continue in 2020.".

Analyst Opinion of Existing Home Sales

The rolling averages for existing home sales have been improving since early 2019. The rolling averages are now well into expansion. This report is much stronger than last month. Housing inventory (homes for sale) has dropped to 21st-century lows.

Econintersect Analysis

  • The unadjusted sales rate of growth accelerated 15.6 % month-over-month, up 15.1 % year-over-year - sales growth rate trend significantly accelerated using the 3-month moving average.
  • The unadjusted price rate of growth accelerated by 1.8 % month-over-month, up 5.9 % year-over-year
  • The homes for sale unadjusted inventory declined this month compared to last month and remains historically low.

NAR reported:

  • Sales up 3.6 % month-over-month, up 10.8 % year-over-year
  • Prices up 7.8 % year-over-year
  • The market (from Econoday) expected existing home sales level of 5.390 M to 5.500 M (consensus 5.430 M) with a reported value of 5.54

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The graph below presents the unadjusted home sales volumes.

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Here are the headline words from Lawrence Yun, NAR's chief economist:

Home sales fluctuated a great deal last year. I view 2019 as a neutral year for housing in terms of sales. Home sellers are positioned well, but prospective buyers aren't as fortunate. Low inventory remains a problem, with first-time buyers affected the most.

Conditions for buying are favorable and will likely continue in 2020. We saw the year come to a close with the economy churning out 2.3 million jobs, mortgage rates below 4% and housing starts ramp up to 1.6 million on an annual basis. If these factors are sustained in 2020, we will see a notable pickup in home sales in 2020.

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