WASHINGTON -- Sales of previously occupied homes fell in December for the first time in four months as many would-be buyers were frustrated by a lack of available houses, which fell to the lowest level in more than two decades.
Existing home sales dropped 4.6% last month from November, to a seasonally adjusted annual rate of nearly 6.2 million, the National Association of Realtors said Thursday.
The demand for homes remains healthy, the group said, with median prices jumping nearly 16% from a year ago to $358,000. Homes sold in an average of 19 days, slightly higher than in the summer but still quite rapid. Yet the number of houses for sale slumped to just 910,000 in December, the fewest since records began in 1999.
Sales soared after pandemic lockdowns ended and many Americans sought more space for indoor offices and online schooling. Healthy home-buying was also fueled by strong job and income gains.
With the Federal Reserve set to raise interest rates as soon as March, home sales are expected to decline slightly this year, said Lawrence Yun, chief economist for the Realtors.
Mortgage rates started to rise sharply in late December, after last month's sales were mostly completed. The anticipation of higher borrowing costs likely drove home purchases higher in the fall. The average rate on a 30-year fixed mortgage reached nearly 3.6% this week, the highest since March 2020 and up from 3.05% a month ago.