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Sales rose 3.6 percent year-over-year in December to a seasonally adjusted annualized rate of 5.54 million, the highest since February 2018. Existing home sales increased in the Northeast, South and West, but fell in the Midwest.
“We saw the year come to a close with the economy churning out 2.3 million jobs, mortgage rates below 4% and housing starts ramp up to 1.6 million on an annual basis,” Lawrence Yun, chief economist at the National Association of Realtors, said in a statement. “If these factors are sustained in 2020, we will see a notable pickup in home sales in 2020.”
The housing market ended 2019 on a strong note as joblessness in America held at historically low levels. The U.S. unemployment was 3.5 percent at the end of the year, matching levels last seen in 1969.
The strong job market isn’t the only tailwind for housing as favorable borrowing conditions and an inventory shortage have also provided a boost.
The U.S. 30-year fix rate was at 3.625 percent on Wednesday, near its lowest levels since September. Before that, one would have to go back to November 2016 to see a rate that low.
Total inventory of previously owned homes have fallen for seven straight months and totaled 1.4 million at the end of December, according to NAR.