by Christopher Ragber
WASHINGTON (AP) – Sales of previously occupied homes fell for the first time in four months in December as many buyers were frustrated by the lack of available homes, which fell to their lowest level in more than two decades.
The National Association of Realtors said Thursday that current home sales fell 4.6% from November last month to a seasonally adjusted annual rate of about 6.2 million.
Demand for homes remains healthy, the group said, with average prices rising nearly 16% from a year ago to $358,000. Homes sold out in an average of 19 days, a little longer than in the summer but still pretty fast. Yet the number of homes for sale fell to just 910,000 in December, the lowest since records began in 1999.
“It’s very hard to grow meaningfully for sales when there just isn’t that much available to buy,” said Kwame Donaldson, senior economist at real estate website Zillow. “Current home sales fell back in December after an unexpectedly strong autumn. … This reversal can be traced back to a dramatic reduction in options for buyers.”
Donaldson said inventories of homes for sale have fallen 40% from pre-pandemic levels.
Even with the decline in December, it has been a healthy year for home sales. Annual sales reached 6.1 million in 2021, the National Association of Realtors said, up 8.5% from 2020 and the highest since 2006, the height of the housing bubble that crashed the following year.
Sales soared after pandemic lockdowns ended and many Americans sought more space for indoor offices and online schooling. Healthy home-buying was also encouraged by strong job and income gains.
The increase in new Omicron infections may have discouraged some people from putting their homes on the market and opening them to wider traffic, Donaldson said.
Realtors chief economist Lawrence Yoon said home sales are expected to decline this year, with the Federal Reserve preparing to raise interest rates in March.
Mortgage rates began to rise sharply in late December, after most of last month’s sales were completed. Anticipation of higher borrowing costs drove home purchases further in the fall. The average rate on 30-year term mortgages soared to around 3.6% this week, the highest since March 2020 and 3.05% a month ago.