Last year proved to be the best year in a decade for existing-home sales despite a decline in sales in December, according to the National Association of Realtors.
December saw a decrease in existing sales by 2.8% to a seasonally adjusted annual rate of 5.49 million, down from 5.65 million in November.
Last month’s median existing-home price was $232,000 – an increase of 4.0% from the same month in 2015. December was the 58th straight month of year-over-year gains, according to the NAR.
"Solid job creation throughout 2016 and exceptionally low mortgage rates translated into a good year for the housing market," NAR Chief Economist Lawrence Yun said. "However, higher mortgage rates and home prices combined with record low inventory levels stunted sales in much of the country in December."
Yun added that surging rates in early November caught prospective buyers off guard, preventing many from buying a home in the last two months of 2016.
By the end of last month, total housing inventory went down by 10.8% to 1.65 million existing homes for sale – the lowest since the NAR began tracking housing supply in 1999.
"Housing affordability for both buying and renting remains a pressing concern because of another year of insufficient home construction," Yun said. "Given current population and economic growth trends, housing starts should be in the range of 1.5 million to 1.6 million completions and not stuck at recessionary levels. More needs to be done to address the regulatory and cost burdens preventing builders from ramping up production."
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