sales of old homes in 2021 at their highest since 2006

Washington (awp/afp) – Sales of old homes in 2021 were at their highest since 2006 and, faced with demand that remains very strong, the number of properties available for sale even reached a historic low in December.

Sales of second-hand homes increased by 8.5% in 2021 compared to 2020, and, with 6.12 million properties sold, registered the highest since 2006, just before the bursting of the real estate bubble, according to figures released Thursday by the National Federation of American Realtors (NAR).

The still very strong demand, faced with an insufficient supply to meet it, caused sales to fall by 4.6% in December compared to November, and 6.18 million houses and apartments changed hands, at an annualized rate.

Analysts had expected a smaller decline and had forecast 6.42 million sales.

“At the end of December, the stock of unsold old homes fell to a historic low of 910,000, which is equivalent to 1.8 months of the monthly sales rate,” the federation detailed in its press release.

“December saw sales pull back, but the decline was more a sign of supply constraints than an indication of weaker demand,” said Lawrence Yun, chief economist at NAR.

He sees this slowdown in sales continuing over the next few months due to the rise in mortgage rates.

“I also expect house prices to rise more moderately, by 3% to 5% in 2022 and then similarly in 2023 as additional supply of (new) property comes to market” , said the economist.

The median price of an old home was $358,000, or 15.8% more than in December 2020.

The real estate sector has been booming since the second half of 2020. Widespread telecommuting, rock-bottom interest rates combined with rising household savings had prompted a rush for larger houses and apartments further away from town centres, causing prices to soar.

afp/rp

–