The shrinking supply of homes for sale at the end of last year hit December sales volume in a big way. Closed sales of previously owned homes dropped last month by 4.6 percent from November and 7.1 percent from December 2020, according to the National Association of Realtors.
Experts pointed out that the December decline in sales was caused primarily because of so few homes for buyers to choose from around the holidays. There were just 910,000 homes for sale in the U.S. at the end of December, down 14.2 percent from a year ago. This equates to a supply of just 1.8 months at the current sales pace, far below the six months of inventory experts consider to be a balanced market for buyers and sellers.
Despite the sour end to the year, 2021 was still the strongest sales year for the housing market since 2006 as mortgage rates hovered near historic lows, motivating buyers.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.0 percent and 15-year rates are near 2.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (877) 700-0942 and your questions may be featured in an upcoming article.
