Existing Home Sales Are Stronger than Expected

Sales of single-family homes jumped 16.1% from the November total to a seasonally adjusted annual rate of 4.82 million, up 7.1% compared with December 2014.

Total existing home sales jumped 14.7% month-on-month in December to an annualised rate of 5.46m units, according to the National Association of Realtors, and were left standing 7.7% higher than a year ago. November’s sales pace was unrevised at 4.76 million units.

The immediate impact of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures rule in October is quickly coming to light as existing-home sales bounce back after November’s steep drop.

“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”, he said.

WASHINGTON (AP) – U.S. home sales rebounded in December after new regulations had delayed the completion of purchases in November.

The median existing-home price for all housing types in December grew to $224,100, up 7.6% from December 2014 ($208,200).

December’s strong rebound in sales, the biggest monthly gain on record, was partly catch-up from November’s rule-related delays, NAR said.

Next Wednesday, the Commerce Department is scheduled to release its report on new home sales in the month of December.

Economists surveyed by MarketWatch had forecast a 5.21 million pace. Unsold inventory is at its lowest level since January 2005 at a 3.9-month supply in December.

NAR also believes that the prospect of higher mortgage rates may have boosted sales at the end of 2015. The median price in the Midwest was $171,000, up 7.5% from a year ago. The increase wrapped up the housing market’s best year in the past 9 years.

The share of first-time buyers increased to 32% in this month, up from 30% in November and 29% a year ago.

FACTORY DATA SURPRISES While a separate report hinted at some stabilization for the downtrodden manufacturing sector, dollar strength and on-going efforts by businesses to reduce an inventory overhang suggest the sector’s troubles are far from over. He cited low existing-home supply, potentially slow economic growth in 2016 and slacking demand for homes in oil-producing regions as reasons to temper expectations. All-cash transactions made up about 24 percent of purchases.

“Builders are trying to ramp up production of new homes to add supply, but they have been limited by a combination of factors, including a shortage of skilled laborers, still-tight lending markets, and their own (well-grounded) conservatism after the housing boom-bust of the past decade”, Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a note to clients.