Home Sales Reach Highest Point Since 2006

Despite slim inventory the total number of home sales has been quite high

According to a recent release from the National Association of Realtors (NAR), even though the total number of existing home sales had dipped slightly during the month of December breaking a 3 month streak of gains, the total overall sales for the year were high.

Despite all of the four major regions in the United States seeing a dip in sales at the end of the year, overall total sales for all of 2021 had increased by 8.5%. 

"December saw sales retreat, but the pull back was more a sign of supply constraints than an indication of a weakened demand for housing," said Lawrence Yun, NAR's chief economist. "Sales for the entire year finished strong, reaching the highest annual level since 2006."

Home Sales Forecast

Lawrence Yun does expect that the number of home sales may slow their pace a bit with mortgage rate upticks. He feels that rates will stay under 4% this year with wages holding as we have a tight labor market. 

"This year, consumers should prepare to endure some increases in mortgage rates," Yun cautioned. "I also expect home prices to grow more moderately by 3% to 5% in 2022, and then similarly in 2023 as more supply reaches the market."

Inventory Level

Total housing inventory was down at the end of 2021 as compared to the month before and also to the same time last year. Available inventory is hovering at a 1.8 month supply at the current sales pace which is lower than the month before and last year at this time. 

Home Prices

Home prices continue to creep up with the median existing-home price for all property types up 15.8% at the end of the year over 2020. This made for the 118th straight month for year-over-year gains - the longest stretch on record.

Number of Days on Market

Homes stayed on the market available for sale for an average of 19 days for the month of December which was 2 fewer days than that of 2020. We also saw the majority of the homes at 79% of them being on the market for less than one month.