Home Sales Tumbled in December

Wall Street Journal writers Laura Kusisto and Sarah Chaney reported earlier this week that, “Home sales tumbled in December to their weakest level since 2015, ending a difficult year at a new low and offering fresh evidence that the housing market could be in for a bumpy ride in 2019.

“Some of the same forces that pounded global financial markets in the fourth quarter caused home buyers to pull back at the end of the year. Home sales were weighed down by a surge in stock-market volatility, uncertainty as the government shutdown began and rising interest rates, which pushed up mortgage rates in November to their highest level in seven years.

Housing also suffered from high home prices and a dearth of starter homes in major markets, a nagging problem for much of last year that shows little sign of abating. A growing U.S. economy and low unemployment haven’t kept home sales from sputtering.”

The Journal writers noted that, “December capped the weakest year for home sales in three years. Existing-home sales fell 6.4% in December from the previous month to a seasonally adjusted annual rate of 4.99 million, the National Association of Realtors said Tuesday. Compared with a year earlier, sales in December declined 10.3%.”

Kusisto and Sarah Chaney also pointed out that, “Meanwhile, home-price growth has also slowed significantly, a sign that many owners struggling to sell their homes are starting to cut prices or ask for a more conservative number. The median sale price for an existing home in December grew 2.9% from a year earlier—the smallest increase since March 2012, when the market was still depressed from the housing crash.

“That slump could be good news for buyers, many of whom can’t afford higher prices or worry about another housing bubble, and it could inject some positive momentum into the market.”

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