Existing home sales pop in December

Wells Fargo Research Team Wells Fargo

Summary

Existing home sales jumped 5.1% to a 4.35 million unit pace in December, the fourth consecutive monthly gain. As shown in the chart below, resales have trended higher in recent months, a rise presaged by a gentle climb in mortgage purchase applications. Slightly lower mortgage rates and improved supply explain the uptick.

We note that 30-year mortgage rates have eased further to roughly 6% since the Trump administration announcement of GSE MBS purchases, and so a near-term continuation of this trend would not be surprising. As outlined in the latest monthly update we published this morning, we are not expecting a significant decline in mortgage rates from here, however. This means home sales, though on the mend, are not likely to show a lot of energy in the year ahead.

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Wells Fargo Research Team

Wells Fargo

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