December 2015 Existing Housing Sales Robust — Up 7.7 Percent Year-Over-Year and Up 14.7 Percent Vs. TRID-Impaired November 2015

Existing home sales in December 2015 came roaring back to a seasonally-adjusted annualized rate (SAAR) of 5.46 million according to the National Association of Realtors® (NAR).  Sales were  up 7.7 percent year-over-year and up 14.7 percent after a dismal November existing housing sales volume due to the newly implemented TRID lending rules.  Median price rose 7.6 percent versus a year ago to $224,100.

As shown in the following graph, sales are very near the peak seen following the implosion of the housing bubble and the tax incentives given in 2009 and 2010.

U.S. Existing Home Sales & Median Prices

December historically has an end-of-the-year effect with a significant increase sequentially from November in the number of sellers closing at year end.  The following graph shows the non-seasonally adjusted sales numbers by month, comparing 2015 to 2014.


Median price continues to rise, up 7.6 percent year-over-year and up 6.4 percent based on a 12-month moving average.


Adding to rising price is the lack of available listings.  Economists typically peg six months of inventory as normal for existing housing.   The current 4.4 months inventory is the least recorded since the collapse of the housing market in 2008.


Other details of the December 2015 NAR releases included:

  • All-cash transactions made up one-in-four (24 percent) of all closings
  • 15 percent of all home sales were purchased by investors.  Investors paid cash in 64 percent of their transactions
  • First-time homebuyers, that in prior normal times accounted for four of every 10 purchases, made up just 32 percent in December 2015
  • Foreclosures made up just 6 percent of all transactions in December 2015 and sold for an average discount of 16 percent versus non-distressed properties
  • Short sales made up just 2 percent of closings with an average 15 percent price discount versus non-distressed properties
  • At a combined 8 percent (short sales and foreclosures), distressed sales were down from 11 percent a year ago
  • Homes closed in December 2015 were on the market a median 58 days, down from 66 days a year ago.   Short sales were on the market a median 86 days, foreclosures 68 days and non-distressed properties 57 days.   Three in 10 homes (32 percent) were on the market less than one month

To read the entire NAR release along with access to several data series, click

So where is housing heading in 2016?  Prior to this release, NAR had forecast a 1.6 percent increase in sales volume.  Fannie Mae is seeing a 1.96 percent rise.  The MBA is estimating a 4.66 percent increase.  My model shows a 4.87 percent gain in total housing sales.   Time will tell.

Housing is the best yet since the recovery has commenced with a strong trajectory heading into 2016.


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