Existing-Home Sales Fade in December, But 2017 Saw Substantial Gains
This morning's release of the December Existing-Home Sales increased from the previous month to a seasonally adjusted annual rate of 5.57 million units. The Investing.com consensus was for 5.72 million. The latest number represents a 3.6% decrease from the previous month and a 1.1% increase year-over-year.
Here is an excerpt from today's report from the National Association of Realtors.
Lawrence Yun, NAR chief economist, says the housing market performed remarkably well for the U.S. economy in 2017, with substantial wealth gains for homeowners and historically low distressed property sales. “Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said Yun. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.” [Full Report]
For a longer-term perspective, here is a snapshot of the data series, which comes from the National Association of Realtors. The data since January 1999 was previously available in the St. Louis Fed's FRED repository and is now only available from January 2014. It can be found here.
Over this time frame, we clearly see the Real Estate Bubble, which peaked in 2005 and then fell dramatically. Sales were volatile for the first year or so following the Great Recession. The latest estimate puts us back to levels reached before the recession.
The Population-Adjusted Reality
Now let's examine the data with a simple population adjustment. The Census Bureau's mid-month population estimates show a 17.6% increase in the US population since the turn of the century. The snapshot below is an overlay of the NAR's annualized estimates with a population-adjusted version.
Existing-home sales are 6.5% above the NAR's January 2000 estimate. The population-adjusted version is 8.4% below the turn-of-the-century sales.
Existing-Home Sales Median Prices for Single Family Homes
We've added a chart for the last 12 months of Existing-home sales median prices for single-family homes for reference.