• December existing home sales rose 0.7% from November and 22.2% from December 2019, to 6.76 million (SAAR), according to the National Association of Realtors. In total, 5.64 million homes were sold in 2020, up 5.6% from 2019 and in line with Zillow expectations.

• The median existing-home price for all homes sold in December was $309,800, up 12.9% from December 2019 and the 106 straight month of annual growth.

• Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from a year ago.

In spite of all the pandemic-related challenges thrown at the housing market last year, one last unexpectedly strong monthly gain in sales in December will ensure that 2020 will go down as the best year for existing home sales since 2006. Even as it did slow transactions down briefly in the spring, COVID-19 did nothing to diminish demand for housing over the past year, and may in fact have pushed more people into the market as they reconsidered their housing wants and needs in light of increased telework flexibility and/or a need for more or different space during quarantine. Demand rose to its highest level in years, and would have been expected to be high even without added COVID pressures, thanks largely a demographic wave of 20- and 30-somethings aging into homeownership. This elevated demand — boosted further by historically low mortgage rates — and the rampant competition over homes that followed, pushed down the typical time on market for sold homes by almost a month compared to December 2019 and pushed prices upward at a record pace. The strong growth in sales activity that became commonplace in the summer may have recently slowed, and the scorching pace of home price appreciation will likely limit buying opportunities for some home shoppers. But with the demand unlikely to ease in the near future, mortgage rates expected to stay low and the economy primed to gradually improve in the months ahead, this elevated pace of home sales appears likely to endure into 2021.

The post December Existing Home Sales: Why 2020 will go Down as the Best Year in a Generation appeared first on Zillow Research.