| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Annual Rate | 3.970M | 3.900M to 4.030M | 4.02M | 4.09M | 4.08M |
| Month over Month | -1.5% | -7.7% | -7.9% | ||
| Year over Year | -34.0% | -35.4% | -35.5% |
Highlights
Existing home sales are down 1.5 percent in December to 4.02 million units after a small downward revision to 4.08 million units in November. Home resales are down 34.0 percent compared to a year ago. The December level is above the consensus of 3.97 million units in an Econoday survey. While home resales are now down for the 11th month in a row, the pace of decline is decelerating. This is likely due to recent dips in mortgage interest rates. Total sales for 2022 were 5.03 million units, down 17.8 percent from 2021.
The Freddie Mac 30-year fixed rate for a mortgage averaged 6.36 percent in December, down from 6.74 percent in November and the near-term average peak of 6.90 percent in October. For January to date, the rate is down to 6.32 percent.
Sales of existing single-family homes are down 1.1 percent in December to 3.60 million units compared to 3.64 million units in November. Multi-unit sales are down 4.5 percent to 420,000 in December after 440,000 in November.
Lower mortgage rates may bring out some buyers, especially with the median price of an existing home down 1.5 percent to $366,900 in December after $372,600 in November, and up only a mild 2.3 percent compared to a year ago. However, weakening prices mean that fewer current homeowners will be motivated to put their homes on the market. The supply of homes available for sale is down 4 tenths to 2.9 months in December, its lowest since June.
While prices may be down, competition for available units could be fierce in the spring buying season. In December, 31 percent of homes sold went to first time buyers compared to 28 percent in November. This suggests that renters are looking to buy while the market is more favorable in terms of affordability. Lower mortgage rates in January may bring more buyers into the market to jump start the spring buying season. Buyers will be getting prequalified in order to lock in a better mortgage rate to shop in the next month or two.
The Freddie Mac 30-year fixed rate for a mortgage averaged 6.36 percent in December, down from 6.74 percent in November and the near-term average peak of 6.90 percent in October. For January to date, the rate is down to 6.32 percent.
Sales of existing single-family homes are down 1.1 percent in December to 3.60 million units compared to 3.64 million units in November. Multi-unit sales are down 4.5 percent to 420,000 in December after 440,000 in November.
Lower mortgage rates may bring out some buyers, especially with the median price of an existing home down 1.5 percent to $366,900 in December after $372,600 in November, and up only a mild 2.3 percent compared to a year ago. However, weakening prices mean that fewer current homeowners will be motivated to put their homes on the market. The supply of homes available for sale is down 4 tenths to 2.9 months in December, its lowest since June.
While prices may be down, competition for available units could be fierce in the spring buying season. In December, 31 percent of homes sold went to first time buyers compared to 28 percent in November. This suggests that renters are looking to buy while the market is more favorable in terms of affordability. Lower mortgage rates in January may bring more buyers into the market to jump start the spring buying season. Buyers will be getting prequalified in order to lock in a better mortgage rate to shop in the next month or two.
Market Consensus Before Announcement
Existing home sales in December are expected to contract further to a 3.970 million annualized rate versus November's lower-than-expected 4.090 million.
Definition
Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.
Description
This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.
Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.
Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.
Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
