Economist's Insights

Existing Home Sales Slowed More than Expected as Inventory Fell to New Series Low

Jan 24, 2018

The pullback in existing home sales in December was larger than expected and November’s gain was trimmed a touch but remained the fastest pace for sales since February 2007. The 3.6% MoM decline to close out 2017 was driven by weaker activity across all four regions. Sales in the Northeast, the least heavily-weighted region, saw the biggest percentage drop of 7.5%. Activity in the Midwest slowed by 6.3% and sales in the South, the most heavily-weighted region, were 1.7% weaker. Sales in the West saw a similar 1.6% drop. Although the median price dipped in December, prices remained 5.8% higher than a year ago. While steady demand continues to support prices, supply forces are also contributing to the continued appreciation. Inventory of existing homes fell to 1.48MM units which is enough to cover just 3.2 months of sales; both metrics represented the lowest reading in the data series’ history back to 1999.