US December existing home sales fall more than expected

US existing-home sales fell 3.6% to a seasonally adjusted annual rate of 5.57m from a downwardly revised 5.78m in November, according to data from the National Association of Realtors, and further than the 2.2% consensus forecast.

After last month’s decline, sales are still 1.1% above a year ago, the NAR added.

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.”

The median existing-home price for all housing types in December was $246,800, up 5.8% from December 2016. December’s price increase marks the 70th straight month of year-over-year gains.

Total housing inventory at the end of December dropped 11.4% to 1.48m existing homes available for sale, and was now 10.3% lower than a year ago and has fallen year-over-year for 31 consecutive months. Unsold inventory was at a 3.2-month supply at the current sales pace, which is down from 3.6 months a year ago and is the lowest level since NAR began tracking in 1999.

“The lack of supply over the past year has been eye-opening and is why, even with strong job creation pushing wages higher, home price gains – at 5.8% nationally in 2017 – doubled the pace of income growth and were even swifter in several markets,” said Yun.