MNI DATA IMPACT:US 2020 Existing Home Sales Highest Since 2006

Sales of U.S. existing homes set the fastest pace since 2006 in 2020 even as year-end supply plummeted to an all-time low, pricing more potential buyers out of the market, the National Association of Realtors said Friday.

Sales in December surged 0.7% to a seasonally adjusted annual rate of 6.76 million, putting the annual tally of homes sold in 2020 at 5.64 million, the highest level since 2006 when sales of existing homes totaled 6.48 million. From a year earlier, the December sales pace advanced 22%.

The housing market should see another robust year, NAR chief economist Lawrence Yun said, anticipating inventory growth in the springtime and low mortgage rates through the end of 2021. December foot traffic through available properties, a leading indicator of existing home sales, was up 24% in December, suggesting the upcoming months look "very strong," Yun said.

LOW INVENTORY

The national median home price fell slightly to USD309,800 from USD310,900 in November, but was still up 12.9% from a year earlier and set a record for prices for the month of December. Sales of larger, more expensive homes surged in December, skewing the median figure upward, Yun said. Sales of homes priced at more than USD1 million were up 90% year-over-year.

Homes for sale at the end of December hit an all time low of 1.7 million, down 23% from one year ago. Inventory was down across all price categories excluding the "upper tier", or homes priced at upwards of USD750,000, Yun said.

"If we had more inventory on the lower end, maybe we'd have more home sales," he said, adding that sales in 2020 could have potentially reached 8 million if inventory levels had been strong enough to keep price growth under control. "Inventory is clearly the limiting factor."