Existing Home Sales: Modest Declines in Final Month of 2017

Bottom Line: Existing home sales fell modestly in December. After bouncing in October and November in the wake of the hurricanes, home re-sales averaged 5.62 million in the 4th Quarter and 5.50 million for all of 2017, suggesting that the housing market improved modestly throughout the year. 2016 and 2015, for instance, averaged 5.44 and 5.23 million units, respectively. Inventories of homes available for sale dropped moderately, and the trend in months’ supply declined slightly. The trend towards lower supply continued throughout 2017, even adjusted for the hurricane-related volatility. Existing Home Sales FELL by 3.6% in December to 5.57 million, compared with market expectations for a decline to 5.70 million. The prior month was revised down from 5.81 to 5.78 million. Home re-sales are now 1.1% ABOVE their year ago level but are 23.2% BELOW their September 2005 record high. 42.0% of single family homes sold were priced in between 100k to 250k and 34.0% of single family homes sold were priced in between 250k to 500k. Single family home sales are down 4.1% year-over-year for prices in between 100k to 250k and are up 5.1% for prices in between 250k to 500k. The Inventory of Homes Available for Sale FELL by 11.4% to 1,480k and are now 10.3% BELOW their year ago level. Because inventories declined while sales declined, the Months Supply FELL to 3.2 months from 3.5 months. This is still well BELOW its July 2010 cyclical peak of 12.4 (which was its highest level since 1982) and even BELOW the 6 month level that is considered 'normal'. Home Prices ROSE compared to their year ago levels. Average home prices are 4.8% ABOVE their year ago levels while median home prices are 5.8% ABOVE their year ago levels.