January 20, 2022 | 11:08
Sales Sail to Best Year Since 2006
Existing home sales fell more than expected, down 4.6% to 6.18 mln a.r. in December, ending a three-month winning streak. All regions posted a drop amid lean inventory and a pickup in mortgage rates that are now at the highest since the onset of the pandemic. But, although contract closings lost some steam at the end of last year, for all of 2021 they managed to punch above the 6-million mark for the first time in 15 years.
The median sales price climbed to $358,000, up 15.8% y/y as the number of homes for sale fell 14.2% y/y to 910,000. And, at the current pace, it would take a record low 1.8 months to sell all homes on the market.
In a separate report, jobless claims unexpectedly jumped again, up 55k to 286k in the January 15 week, marking the highest since mid-October as rising Omicron cases paused progress in an already-tight labour market. The data covered the same period that the government surveyed businesses for January’s nonfarm payrolls, suggesting job growth may be constrained this month, even if temporary.
Meanwhile, the Philadelphia Fed’s index of manufacturing conditions rose by 7.8 points to 23.2 in January. On and ISM-adjusted basis the gauge fell 2.6 points to 57.6, but that’s still above the 50-mark signaling expansion. Although momentum has slowed, factories continue to hum along in the face of ongoing labour and supply shortages.
Bottom Line: Despite slowing momentum, the U.S. housing market is expected to remain robust for some time amid a still-tight labour market.