Washington (AFP) - Sales of existing US homes were stronger than expected in December, but the total for the full year was unchanged from 2018, according to an industry report Wednesday.
The housing market has become an important bright spot in the US economy but the final numbers in 2019 did not reflect a big increase even as prices rose, according to the National Association of Realtors.
Still, stronger sales and higher prices mean fatter commissions for real estate brokers and could lift GDP calculations for the final months of last year.
Total sales of single-family homes, townhomes, condos and co-ops totaled 5.34 million last year, the same level as in 2018, NAR said.
"I view 2019 as a neutral year for housing in terms of sales," NAR Chief Economist Lawrence Yun said in a statement.
"Home sellers are positioned well but prospective buyers aren't as fortunate. Low inventory remains a problem, with first-time buyers affected the most."
Low unemployment, steady wage gains and cheaper mortgages have fueled demand, leaving home builders struggling to add supply to the market.
In December alone, sales rebounded, increasing 3.6 percent compared to November, putting sales a healthy 10.8 percent higher than the pace of December 2018.
But median prices jumped 7.8 percent compared to December 2018, rising to $274,500, the 94th straight month of gains, NAR said.
Meanwhile, inventories fell 14.6 percent from November to 1.4 million units, marking six straight months of declines.
At the current sales pace, that represents a supply of just three months, well below the 2019 average of 3.9 months.
Ian Shepherdson of Pantheon Macroeconomics said the housing market had at last digested the blow the 2017 changes to income tax deductions for property taxes that made homeownership less affordable.
"Now that hit has been absorbed and activity is trending higher, following the surge in mortgage applications late last summer," he said in a client note.
"We expect further gains over the next few months, with activity hitting new cycle highs in the spring."
