While the housing market largely bounced along the bottom for most of the year, December ended on a surprisingly high note as existing-home sales surged 5.1% to a seasonally adjusted annual rate of 4.35 million, marking the strongest monthly performance in nearly three years. This unexpected spike provided a welcome jolt to the industry, pushing year-over-year existing-home sales up 1.4%.
December ended on a surprisingly high note as existing-home sales surged to their strongest monthly performance in nearly three years.
Specifically, activity within the single-family home sector climbed 5.1% to an annualized rate of 3.95 million, while condo and co-op sales saw a slightly sharper increase of 5.3%, reaching 400,000 annualized. Although the condo sector experienced a slight dip of 2.4% from the prior year, the overall trend clearly points toward renewed buyer interest, which is certainly better than a lump of coal for the holidays.
Regionally, every major area in the United States enjoyed month-over-month sales gains, showing that the momentum was not isolated to just one corner of the map. The South led the charge with a robust 6.9% increase, reaching a rate of 2.02 million, while the West followed closely with a 6.6% jump.
Even the Midwest managed a respectable 2.0% rise to reach 1 million annualized sales, maintaining steady ground compared to last year. While sales in the Northeast dipped compared to the previous year, the broad monthly improvements suggest that buyers across the country were enthusiastic to lock in deals before the calendar finally flipped.
Inventory levels presented a mixed bag for determined house hunters, as total housing inventory fell 18.1% from November to 1.18 million units. Despite the monthly drop, active listings climbed 12.1% year-over-year, continuing a streak of 26 consecutive months of inventory growth.
However, looking at the bigger picture, inventory sits 3.5% higher than in December 2024. Unsold inventory supply tightened to 3.3 months, down from 4.2 months in November.
Transaction prices remained resilient, as the median existing-home price reached $405,400, up 0.4% year-over-year, despite high costs impacting affordability. Notably, this period marked the 30th consecutive month of year-over-year price increases. The luxury segment has shown particular strength, with U.S. median luxury home sales reaching a record $1,180,000 in Q2 2024, up 8.8% annually.
As the average 30-year fixed-rate mortgage dipped to 6.19% from 6.72% a year ago, conditions improved quite a bit in the fourth quarter.
With full-year existing-home sales stabilizing at 4.06 million and incomes rising faster than housing costs, the stage is now set for a much stronger spring selling season.
