ARLINGTON, Va.—Existing-home sales fell 3.6% in December after reaching a 10-year high – rising 5.1% – in November.
NAFCU Research Assistant Yun Cohen noted in a NAFCU Macro Data Flash report that a lack of inventory is constraining sales, but demand remains strong.
"Looking ahead, inventory and affordability constraints are expected to persist in 2018," Cohen said. "Nevertheless, a healthy economy and strong labor market should support modest growth overall."
December's existing home sales were 1.1% higher than a year ago. According to data published by the National Association of Realtors, the inventory-to-sales ratio reached its lowest level since 1999.
Sales declined in all four regions during December: sales in the Northeast fell by 7.5%, followed by the Midwest (-6.3%), the South (-1.7%) and the West (-1.6%), Cohen said.
Based on current sales, there were 3.2 months of supply at the end of December, down from 3.5 months in November. Analysts consider six months of supply to be roughly balanced between supply and demand. Inventory decreased 11.4% in December and was down 10.3% from a year ago. Inventory has declined year-over-year for 31 consecutive months, Cohen said.
The median existing home price decreased from $247,200 in November to $246,800 (not seasonally adjusted) in December. This is 5.8% higher than the median price from a year ago. December marks the 70th consecutive month of year-over-year price increases, Cohen noted.