December Home Sales Drop Even as Prices Barely Budge; Inventories Skid

By Mark Lieberman

Managing Director and Senior Economist


  • The pace of existing home sales – closed sales –FELL sharply in December: down 3.6 percent to a seasonally adjusted annual sales rate of 5.57 million after a 5.1 percent increase in November
  • The November sales rate was REVISED DOWN 30,000 to 5.78 million;
  • Median price of an existing single-family home DIPPED $400 or 0.2 percent to $246,800;
  • Year-year the median price ROSE 6.3 percent or $14,600;
  • Number of homes available for sale FELL 190,000 or 11.4 percent to 1.48 million;
  • The months’ supply of homes for sale in December FELL to 3.2 – the weakest since the data have been collected — from 3.5 in November.


  • The month-month percentage decline in existing home sales was the largest since February when sales fell 3.9 percent;
  • The sales drop came two months after the Pending Home Sales Index – measuring contracts for sale –had increased 3.5 percent;
  • The median price of an existing home has fallen month-month for five of the last six months;
  • The number of homes for sale has fallen for seven straight months for the first time since NAR has been keeping records 2008.

Data Source: National Association of Realtors: (NAR):

Image result for existing home sales

In advance of the tax code changes which are expected to cut into home sales, the National Association of Realtors posted disappointing numbers for the end of 2017.

Disappointing because not only because the December sales (closings) represented a drop from November but because the main leading indicator – pending home sales (contracts) had been strong in October. Given the 2-month lag between contract and closings, that strength should have translated into stronger closing activity.

Sales dropped in every census region, led by a 7.5 percent decline in the Northeast, perhaps attributable to weather. The Northeast also saw a 4.5 percent price drop from November.

The fundamentals arguing against an increase in home sales remain unchanged and perhaps have gotten even worse with the Administration’s decision to cap mortgage interest and property tax deductibility. The impact of both provisions of the new law will likely be to make home-owning more expensive and tilt the preference to renting.

Hear Mark Lieberman every Friday, on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

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