Sales falling again in the US due to higher mortgage rates, says latest index
Property sales in the United States fell by 6.4% in December and are now down 10.3% compared with the same month in 2017, according to the latest index from real estate agents.
Despite a small rise in October and November, sales are being affected by higher interest rates, says the National Association of Realtors. But chief economist Lawrence Yun expects sales to rise again in the spring.
‘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,’ he said.
The index also shows that the median existing home price for all housing types in December was $253,600, up 2.9% from December 2017 when it was $246,500. It is the 82nd month on a row that prices have increased year on year.
Total housing inventory at the end of December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November, but a rise from 1.46 million a year ago. Unsold inventory is at a 3.7 month supply at the current sales pace, down from 3.9 in the previous month and up from 3.2 months a year ago.
‘Several consecutive months of rising inventory is a positive development for consumers and could lead to slower home price appreciation. But there is still a lack of adequate inventory on the lower priced points and too many in upper priced points,’ Yun pointed out.
A breakdown of the figures shows that sales in the Northeast decreased 6.8% to an annual rate of 690,000, some 6.8% below a year ago. The median price in the Northeast was $283,400, which is up 8.2% from December 2017.
In the Midwest sales fell 11.2% to an annual rate of 1.19 million in December, down 10.5 percent overall from a year ago. The median price in the Midwest was $191,300, unchanged from the previous year.
Sales in the South fell by 5.4% to an annual rate of 2.09 million in December, down 8.7% from last year. The median price in the South was $224,300, up 2.5% year on year.
In the West sales decreased by 1.9% to an annual rate of 1.02 million in December, some 15% below a year ago. The median price in the West was $374,400, up 0.2% from December 2017.