CNBC Turns to NAR for Answers on December Sales Slump
January 23, 2019
What happened to home sales in December? Sales are typically down during the holidays, but December’s seasonally adjusted monthly decline of 6.4 percent left reporters scratching their heads—and calling the National Association of REALTORS® for the trade organization’s insight.
NAR Chief Economist Lawrence Yun told CNBC’s “Nightly Business Report” on Tuesday that such a wide monthly swing is usually accompanied by some big news, like an expiring tax credit or a change in consumer protection law. This time, however, the culprit was likely buyers’ price concerns, Yun said. Using NAR data showing the national median price was $259,100—the highest on record—NBR’s Diana Olick speculated that affordability was a key factor. In addition, mortgage rates had been climbing last fall before peaking in November. Ivy Zelman, CEO of Zelman & Associates, told NBR that the rate spike, combined with consumers’ fear of buying at the top of the market, probably kept many buyers home.
Today’s lower rates portend well for future sales, Yun said. “Softer sales in December reflected consumer search processes and contract signing activity in previous months, when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring,” he said. Watch NBR’s home sales segment, which begins at the 10:12 mark.
Updated: August 19, 2019