Sales of existing homes rose 8.5% in 2021, totaling 6.12 million, the National Association of Realtors reported. This as inventory levels fell to an all-time low of 910,000.
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House hunters have enjoyed near-record low mortgage rates as they look to trade up or become first-time homebuyers. The fixed rate for a 30-year mortgage has ticked up to 3.56% from 2.77% a year ago but remains attractive. The average loan size of a mortgage hit a new record last week of $418,500, according to the Mortgage Bankers Association.
Although sales in December cooled, falling 4.6% to 6.18 million, the market remains tight with 30% of sales driven by first-time homebuyers.
"December saw sales retreat, but the pullback was more a sign of supply constraints than an indication of a weakened demand for housing," said Lawrence Yun, NAR's chief economist.
The average sales price for all homes was $358,000 in December, up nearly 16% from the same period a year ago, the 118th straight month of year-over-year increases, the longest-running streak on record, NAR stated.