WASHINGTON–Home sales in the U.S. surged to a 15-year high in 2021 even as the median price for a home rose nearly 17%.
According to new data released by the National Association of Realtors, existing home sales rose 8.5% in 2021 from a year earlier to 6.12 million. Home sales slowed at the end of the year as the supply of homes for sale fell to a record low. Existing-home sales declined 4.6% in December from the prior month to a seasonally adjusted annual rate of 6.18 million, NAR said. December sales fell 7.1% from a year earlier, the NAR said.
Meanwhile, the median existing-home price in 2021 rose to a record $346,900, up 16.9% from 2020, according to the NAR.
But rising mortgage rates are likely to weigh on home sales this year, said Lawrence Yun, NAR’s chief economist, even though demand remains strong.
“Buyers are there, but the lack of inventory is hindering some of the sales activity,” Yun said.
Reduced Inventory
According to the NAR, there were 910,000 homes for sale at the end of December, down 18% from November and down 14.2% from December 2020. That inventory marks the lowest level on record since NAR began tracking total existing-home inventory in 1999. At the current sales pace, there was a 1.8-month supply of homes on the market at the end of December, also a record low, the NAR said.
As CUToday.info has reported, mortgage rates have risen quickly in recent weeks to the highest level since March 2020. The average rate on a 30-year fixed-rate mortgage was 3.56% as of Jan. 13, according to Freddie Mac.
The NAR further reported the share of first-time buyers in the market fell to 30%, from 31% a year earlier, while existing-home sales fell the most month-over-month in the West, down 6.8%, and in the South, down 6.3%.