U.S existing-home sales drop in December but annual sales hit highest mark since 2006

• Existing-home sales move downwards from the previous month to an annual rate of 6.18 million

• December sales waned 7.1% year on year

U.S existing home sales decreased 4.6% in December, ending a three-month string of increases, while in 2021, existing-home sales totaled 6.12 million – an increase of 8.5% from the prior year and the highest annual level since 2006.

The National Association of Realtors said Thursday that existing-home sales dropped from the previous month to a seasonally adjusted annual rate of 6.18 million. From a year-over-year perspective, sales waned 7.1%. 

"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, in a statement. "Sales for the entire year finished strong, reaching the highest annual level since 2006."

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Total housing inventory was 910,000 units at the end of December, down 18.0 percent from November and 14.2 percent from a year ago (1.06 million). At the current sales rate, unsold inventory has a 1.8-month supply, down from 2.1 months in November and 1.9 months in December 2020.

"We saw inventory numbers hit an all-time low in December," Yun said. "Homebuilders have already made strides in 2022 to increase supply, but reversing gaps like the ones we've seen recently will take years to correct."  

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The median existing-home price3 for all housing types was $358,000 in December, up 15.8 percent from December 2020 ($309,200), as prices jumped across the board.

Regional Breakdown

In December, existing-home sales fell 1.3%, registering an annual rate of 750,000, a 15.7% decrease from December 2020 while in the Midwest it slid 1.3% to an annual rate of 1,500,000. 

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The South retreated 6.3% in December, posting an annual rate of 2,700,000, whereas in the West decreased 6.8%, reporting an annual rate of 1,230,000 in December.