A real estate economist called it right last month when he predicted purchase transactions delayed in November by new integrated disclosures would likely close in December.
National Association of Realtors Chief Economist Lawrence Yun speculated in the December 2015 report from the trade group that a delay in closings was a one-time event.
“The primary reason could be an anomaly as the industry adjusts to the new Know Before You Owe rule,” the economist speculated in the November 2015 home sales report.
“It’s possible the longer timeframes pushed a latter portion of would-be November transactions into December,” he added.
On Friday, NAR reported that
seasonally adjusted existing home sales came in at an annual rate of 5.46 million last month, soaring from 4.76 million in November — the slowest month since April 2014.
The association said that it “the largest monthly increase ever recorded.”
Sales — including single-family homes, townhomes, condominiums and co-ops — were also stronger than in December 2014, when the rate was 5.04 million.
“While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015,” Yun stated in the latest report. “Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year.”
Genworth Mortgage Insurance Chief Economist
Tian Liu issued a statement indicating that the rebound in December 2015 shows that the market is “completely shrugging off the disruption caused by the TRID implementation and resuming its strong run in 2015.”
Leading the month-over-month growth was the West, where existing home sales skyrocketed 23 percent from November to a 1.22 million annual rate.
In the South, sales soared 15 percent to a rate of 2.27 million during December.
An 11 percent increase in the Midwest left the seasonally adjusted annual rate there at 1.22 million,
while a nine percent rise from November in the Northeast put that rate at 0.75 million.
Single-family U.S. sales were up 16 percent from the last report to a 4.82 million rate.
Last month’s activity left 1.79 million existing homes available for sale. The total housing inventory tightened from 1.86 million at the close of 2014.
Time to sell lengthened to 58 days from 54 days in November. But time on the market has shortened compared to 66 days in December 2014.
A 3.9-month supply was the tightest since it was 3.6 months in January 2005.
December’s median existing home price was $224,100. The price expanded eight percent from one year prior. It was the 46th consecutive year-over-year increase.
At nearly a third, first-time buyer share was the highest since August. For all of 2015, first-time buyer share was 30 percent. That was greater than 29 percent for all of 2014 and 2013.
Nearly a quarter of December’s transactions were all-cash sales, thinning from more than a quarter a year earlier.
Distressed sales made up eight percent of total activity, less than 11 percent in the final month of 2014.
Yun weighed in on future activity.
“Although some growth is expected, the housing market will struggle in 2016 to replicate last year’s seven percent increase in sales,” he said. “In addition to insufficient supply levels, the overall pace of sales this year will be constricted by tepid economic expansion, rising mortgage rates and decreasing demand for buying in oil-producing metro areas.”
