U.S existing-home sales drop in December but annual sales hit highest mark since 2006

• Existing-home sales move downwards from the previous month to an annual rate of 6.18 million

• December sales waned 7.1% year on year

U.S existing home sales decreased 4.6% in December, ending a three-month string of increases, while in 2021, existing-home sales totaled 6.12 million – an increase of 8.5% from the prior year and the highest annual level since 2006.

The National Association of Realtors said Thursday that existing-home sales dropped from the previous month to a seasonally adjusted annual rate of 6.18 million. From a year-over-year perspective, sales waned 7.1%. 

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

Read more: US retail sales plunge 1.9% in December amid Omicron variant concerns

Total housing inventory was 910,000 units at the end of December, down 18.0 percent from November and 14.2 percent from a year ago (1.06 million). At the current sales rate, unsold inventory has a 1.8-month supply, down from 2.1 months in November and 1.9 months in December 2020.

"We saw inventory numbers hit an all-time low in December," Yun said. "Homebuilders have already made strides in 2022 to increase supply, but reversing gaps like the ones we've seen recently will take years to correct."  

Read more: US producer price surges 0.2% in December, misses analyst estimates

The median existing-home price3 for all housing types was $358,000 in December, up 15.8 percent from December 2020 ($309,200), as prices jumped across the board.

Regional Breakdown

In December, existing-home sales fell 1.3%, registering an annual rate of 750,000, a 15.7% decrease from December 2020 while in the Midwest it slid 1.3% to an annual rate of 1,500,000. 

Read more: US inflation reaches 7% in December, highest since 1982

The South retreated 6.3% in December, posting an annual rate of 2,700,000, whereas in the West decreased 6.8%, reporting an annual rate of 1,230,000 in December. 

Picture Credits: ET