Many U.S. Real Estate Markets See Readjustment
February 8, 2019
The National Association of Realtors (NAR) has recently released a report that after a few consistent months of increases, existing home sales experienced a dip during the month of December. All of the 4 major real estate market regions across the United States showed a decline which may be mortgage rate related or could be considered normal as things often slowdown for the holidays.
Total existing home sales for properties including single families, condos and townhomes has slipped by 6.4% in December which is 10.3% lower than that of the year before. Lawrence Yun, NAR chief economist shared that this activity may be due to an increase in interest rates during 2018.
“The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
Regarding prices, the median existing home price for the month of December was up by 2.9% which is a ongoing gain for 82 months. Inventory levels were only a little bit down from the month prior, but were higher than last year at this time. Properties were on the market for 46 days on average in December which was up from 40 from the month before.
“Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation,” says Yun. “But there is still a lack of adequate inventory on the lower-priced points and too many in upper-priced points.”
With the holidays at the year’s end and with the government shutdown many markets may have experienced a continued slowdown as we enter the new year. However, with spring market being right around the corner, we will soon see just how much things will increase as they often do in many areas for this big selling season.