Existing-Home Sales in 2020 Highest Since 2006
This morning's release of the December Existing-Home Sales showed that sales rose to a seasonally adjusted annual rate of 6.76 million units from the previous month's revised 6.71 million. The Investing.com consensus was for 6.55 million. The latest number represents a 0.7% increase from the previous month.
Here is an excerpt from today's report from the National Association of Realtors.
WASHINGTON (January 22, 2021) – Existing-home sales rose in December, with home sales in 2020 reaching their highest level since 2006, according to the National Association of Realtors®. Activity in the major regions was mixed on a month-over-month basis, but each of the four areas recorded double-digit year-over-year growth in December.
Total existing-home sales,1 https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.7% from November to a seasonally-adjusted annual rate of 6.76 million in December. Sales in total rose year-over-year, up 22.2% from a year ago (5.53 million in December 2019).
"Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic," said Lawrence Yun, NAR's chief economist. "What's even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market." [Full Report]
For a longer-term perspective, here is a snapshot of the data series, which comes from the National Association of Realtors. The data since January 1999 was previously available in the St. Louis Fed's FRED repository and is now only available for the last twelve months.
Over this time frame, we clearly see the Real Estate Bubble, which peaked in 2005 and then fell dramatically. Sales were volatile for the first year or so following the Great Recession.
The Population-Adjusted Reality
Now let's examine the data with a simple population adjustment. The Census Bureau's mid-month population estimates show a 19.1% increase in the US population since the turn of the century. The snapshot below is an overlay of the NAR's annualized estimates with a population-adjusted version.
Existing-home sales are 29.3% above the NAR's January 2000 estimate. The population-adjusted version is 9.8% above the turn-of-the-century sales.
Existing-Home Sales Median Prices for Single Family Homes
We've added a chart for the last 12 months of Existing-home sales median prices for single-family homes for reference.
The next release of existing home sales will be on February 19.