Existing-home sales in the US soar to best pace in nearly 2 years

Sales of previously owned homes gained 3.6% last month to an adjusted annual rate of 5.54 million.
The median sale price hit $274,500, a 7.8% increase from the year-ago period as buyer demand outpaced market supply and contractors' pace .
The strong buying activity is likely to continue through the year and reach "cycle highs" in the spring, Pantheon Macroeconomics chief economist Ian Shephardson said in a note.
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US existing-home sales leaped higher in December to set their best pace since early 2018, according to new data from the National Association of Realtors .

Sales of previously owned homes gained 3.6% last month after a moderate decline in November, reaching an adjusted annual rate of 5.54 million. Median sale price jumped to $274,500, a 7.8% increase from the year-ago period as construction of new homes was outpaced by buyer demand.

"Home sellers are positioned well, but prospective buyers aren't as fortunate," Lawrence Yun, NAR's chief economist, said in the release. "Low inventory remains a problem, with first-time buyers affected the most."

Total housing inventory reached 1.4 million units at the end of 2019, 8.5% lower compared to the year-ago period. Unsold inventory has fallen for seven straight months from their year-ago levels, signaling continued strain on the housing market.

At the current pace of home sales, it would take only three months to sell all the homes on the market, down from 3.7 months in November.

The robust buying activity is supported by low mortgage rates and is likely to continue through the year, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a Wednesday note.

"We expect further gains over the next few months, with activity hitting new cycle highs in the spring," Shepherdson said.

US homebuilders are rushing to keep track with the market's dwindling supply and soaring prices. Housing starts jumped 17% in December to a 13-year high , according to a January 17 release from the Census Bureau. The seasonally adjusted annual rate for starts reached 1.61 million last month, dwarfing the 1.375 million consensus estimate from economists surveyed by Bloomberg .

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