The National Association of Realtors (NAR) reported that despite a decline in existing-home sales in December, the annual sales numbers hit the highest point since 2006. Year-over-year sales for 2021 were up 8.5 percent and existing-home sales topped 6.12 million, the highest sales in 15 years.
Inventory of existing homes dropped to 910,000 in December, which is equal to 1.8 months of the monthly sales pace, both all-time lows. The median sales price was up 15.8 percent year-over-year to $358,000, marking 118 straight months of year-over-year increases, the longest streak on record. The South region experienced the highest pace of appreciation.
“December saw sales retreat, but the pullback was more a sign of supply constraints than an indication of a weakened demand for housing,” says Lawrence Yun, NAR’s chief economist. “Sales for the entire year finished strong, reaching the highest annual level since 2006.”
Properties stayed on the market for 19 days in December, up from 18 days from November, and 79 percent of homes in December sold in less than a month.
First-time buyers made up 30 percent of home sales in December, down slightly from 31 percent in December 2020. The annual share of first-time buyers was 34 percent in 2021.
“There was a significant surge in first-time buyers at the end of the year,” Yun says. “With mortgage rates expected to rise in 2022, it’s likely that a portion of December buyers were intent on avoiding the inevitable rate increases.”
For a closer look at the housing market in 2021, check out NAR’s 2021 Profile of Home Buyers and Sellers.