Driven By Most Expensive Homes Existing Home Sales Hit Highest Level Since Recession

ARLINGTON, Va.—Existing-home sales rose 0.7% in December to a seasonally-adjusted rate of 6.76 million units, representing a 22.2% increase in sales versus a year ago. The existing-home sales in 2020 were at their highest level since the Great Recession.

"The major headwind for the housing market is record low inventory, now down to 1.9 months of supply," said Curt Long, NAFCU's chief economist and vice president of research. "Demand for higher-priced homes is especially strong, with sales of homes priced over $1 million up 94% compared to this time last year.

"Housing starts are also up 5.8% in December, but it will take plenty more to ease the supply crunch," added Long. "In the meantime, prices will continue to soar. The combination of low mortgage rates and supply shortages should result in a steady pace for home sales in 2021."

Sales rose in two regions in December. The Northwest was up 27.4% versus December 2019, followed by the Midwest (+26.2%), South (+20.7%), and West (+17.9%). Versus a year ago, sales were up in all regions over the month.

Million-Dollar Listings

Added Brian Turner, president and chief economist with Meridian Economics in Dallas, “:ow supply and strong demand continued to raise the heat under home prices. The median price of an existing home sold in December was $309,800, a 12.9% increase compared with December 2019 and the highest December median price on record. Part of the sharp increase in the median price is that home sales are stronger on the higher end of the market, where there is more supply. Sales of homes priced below $100,000 were down 15% annually in December, while sales of homes priced between $500,000 and $750,000 were up 65% annually. Sales of million-dollar-plus homes were up 94% from one year ago.”