WASHINGTON – U.S. home sales fell to their lowest level in three years in December and the percentage of price increases of houses also declined sharply, suggesting a further loss of activity in the housing market.
The weak report from the National Association of Realtors (NAR) on Tuesday also suggested the economy was slowing. A month-long partial shutdown of the federal government, which has delayed data from the Commerce Department is, however, making it difficult to get a good read of the economy.
The NAR said existing home sales declined 6.4 percent to a seasonally adjusted annual rate of 4.99 million units last month. That was the lowest level since November 2015.
November’s sales pace was revised slightly up to 5.33 million unit from the previously reported 5.32 million units.
The current housing unit sales, which make up about 90 percent of U.S. home sales, plunged 10.3 percent from a year ago.
For all of 2018, sales fell 3.1 percent to 5.34 million units, the weakest since 2015.
The housing market has been obstructed by higher mortgage rates as well as land and labor shortages, which have led to tight inventory and more expensive homes. But there are glimmers of hope for the sector. The 30-year fixed mortgage rate has dropped to a four-month low, with much of the moderation occurring in the second half of December and house price inflation is slowing.
The median existing house price increased 2.9 percent from a year ago to $253,600 in December. That was the smallest increase since February 2012.
A survey last week showed a rebound in home builders confidence in January amid optimism over market conditions now and over the next six months, as well buyer traffic.
Stocks on Wall Street were trading lower amid fears of slowing global economic growth after the International Monetary Fund (IMF) released its report. The dollar was little changed against other currencies and U.S. Treasury prices rose.