Sales of previously owned U.S. homes fell to the weakest pace in more than three years, falling short of estimates and indicating the housing market remained in a slowdown as the year ended.
Contract closings decreased 6.4 percent from the prior month to an annual rate of 4.99 million in December, the National Association of Realtors said Tuesday. The median sales price rose 2.9 percent from a year earlier, the least since February 2012, to $253,600, while inventory increased.
The latest results brought the 2018 tally to 5.34 million, the weakest pace since 2015. Analysts expect economic growth last quarter got little help from the industry.
Declines in both single-family and condominium sales indicate the residential real estate industry was struggling to gain traction as elevated property values and a lack of affordable listings discouraged buyers, though more inventory has become available compared with past years.
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While home-price growth is cooling, it’s been outpacing gains in worker pay for several years. That’s kept buying out of reach for many Americans, especially young people who are also saddled with student loans.
Nonetheless, a tight labor market is underpinning demand. “Affordability is more important than jobs,” NAR Chief Economist Lawrence Yun said at a briefing in Washington, referring to the softer results despite a strong labor market.