U.S. existing home sales likely to have slowed slightly in December

Existing home sales in the U.S. had risen in November by 5.6 percent to a 5.82 million-unit pace. The data for December is set to be release tomorrow. According to a Wells Fargo research report, the data is likely to show a slight deceleration, but still-strong performance for existing home sales.

Sales continue to be the most solid in South, which accounts for about 40 percent of existing home sales. The recent rise in buyers is in line with the stronger run of growth the economy has seen in recent months.

The sharp rise in November’s existing home sales came in spite of the continued decline in inventory of homes available for sale. On a year-on-year basis, inventories dropped 9.7 percent. With inventories tight and demand increasing, home prices are being bid higher. The median price of an existing home continues to increase, and is up 5.8 percent over the past year.

“We may see a surge in closings of higher-priced homes in December, which would enable buyers to be grandfathered in with the current more favorable mortgage-interest deduction”, added Wells Fargo.

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