Inventory of Homes for Sale Falls to All-time Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales – closed sales – ROSE 3.6 percent, 190,000, in December to a seasonally adjusted annual sales rate of 5.54 million;
  • Sales pace for October was unchanged;
  • The inventory of homes for sales FELL 14.6 percent, (240,000) to 1.4 million; the months’ supply of homes for sales dropped 0.7 months to 3.0 months.
  • Median price of an existing single-family home ROSE 1.2 percent, $3,200, to $274,500;
  • Year-year the median price is up 7.8 percent or $19,800;

Trends:

  • Year-year sales were UP 2.7 percent, the fifth consecutive month of year-to year increases after 16 months of year-year declines;
  • The inventory of homes for sales fell for the seventh straight month to its lowest level since the NAR began publishing its home sales report in 1999
  • The months’ supply of homes for sale also fell to the lowest level on record;
  • The annual sales pace of existing single-family homes rose to its highest level since March 2018 (5.6 million);

Data Source: National Association of Realtors (NAR)

Image result for existing home sales

With near record low mortgage rates existing home sales jumped up in December but that could be a temporary blip.

The monthly report of the National Association of Realtors also showed a record low inventory of homes for sale and the months’ supply of homes on the market.

The good news for realtors and sellers alike came with an increase in prices as the median price of an existing single-family home rose 1.2 percent in December, the second straight month-month increase after four straight months of decline.

For those shopping by payment, the price increase was essentially offset by all but flat interest rates. The average rate for a 30-year fixed rate loan in December was 3.72 percent, up a smidgen for 3.70 percent in November.

The decline in inventory could be reversed with the price increase as would-be sellers are enticed back into the market. That would be good news not just for retailers but appliance and furniture retailers who have seen revenues suffer with weak home sales.

For all of 2019, the average pace of home sales was 5,341.000 up just 0.13 percent for 2018 when the average sales pace was 5,334,000.

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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