Move-in ready: US existing home sales hit 14-year high in 2020

Home sales in the US rose to 6.48 million last year, the highest total since the peak of the housing boom.

The recent spike in United States home prices reflects a boost in demand as Americans locked down during the coronavirus pandemic seek to move to larger homes [File: Michael Conroy/AP Photo]

Sales of existing homes in the United States rose 0.7 percent in December, pushing the entirety of 2020 to a pace not seen in 14 years and providing one of the few bright spots for a US economy mired in a global pandemic.

Rising sales in the final month of the year lifted activity to a seasonally adjusted annual rate of 6.76 million units in December, the National Association of Realtors (NAR) reported Friday.

For all of 2020, sales rose to 6.48 million, the highest total since 2006 at the height of the housing boom. That represented a 5.6 percent gain from the 5.34 million previously owned homes sold in 2019.

The median sales price was $309,800 in December, up 12.9 percent from a year ago.

The big jump in prices reflected strong demand as Americans locked down by the coronavirus pandemic and forced to work from home are seeking to move to larger homes. Sales have been boosted by record-low mortgage rates.

Economists predicted those trends would continue this year, though mortgage rates may rise slightly from record lows if the economy improves as expected as vaccines become more widely available.

“Expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already under way,” said Lawrence Yun, chief economist for the NAR.

“As COVID-19 levels drop due to vaccinations and warmer weather, expect more Americans to put their houses on the market,” Robert Frick, corporate economist at Navy Federal Credit Union, predicted.

The inventory of unsold homes fell to an all-time low of a 1.9-month supply, down from supplies of 2.3 months in November and 3 months a year ago. Homes typically remained on the market for 21 days in December, down from 41 days that a home would be on the market before selling in December 2019.

Economists said that homebuilders have boosted construction in response to the strong demand, but still face supply constraints such as a lack of available building lots.

For December, sales of single-family homes rose 0.7 percent to a rate of 6.03 million while sales of condominiums were up 1.4 percent to 730,000.

Source: AP