U.S. home sales rose unexpectedly in December, but house prices could rise amid a low housing market schedule in the coming months.
The National Association of Realtors said Friday that average home sales rose 0.7% to a quarterly rate of 6.76 million units that were converted quarterly last month.
Economists surveyed by Reuters had forecast sales to fall 2.0% to 6.55 million units in December.
Home resale, which makes up the majority of U.S. home sales, rose 22.2% year-over-year. They reached a total of 5.64 million in 2020, the most since 2006.
Last month, sales rose in the Northeast and South. They were unchanged in the Midwest and declined in the West.
The housing market is backed by cheaper mortgages and exodus from town centers to suburbs and other low-density areas as companies allow employees to work from home and schools move to online classes because of the pandemic. Approximately 23.7% of employees work from home. Those earning lower wages in the services sector have been in the real crisis of COVID-19.
But supply remains a challenge. Although the government announced on Thursday that home and building permits had risen in December to levels last seen in 2006, builders are complaining about higher timber prices and persistent labor and land shortages, and they said “delayed delivery times had put pressure on home prices. . ”
In December, there were 1.07 million unprecedented homes on the market, down 23% from a year ago. The current median price rose 12.9% from a year ago to $ 309,800 in December. House prices rose 9% in 2020.
At the December sales pace, it would take a record 1.9 months low to outperform the current inventory, down from 3.0 months from a year ago. Six to seven month supply is seen as a healthy balance between supply and demand.
Reporting by Lucia Mutikani, Editing by Andrea Ricci