US existing home sales likely to surge in December

In US, November sales of existing homes dropped to 4.76 million units (annualized) , coming in considerably below expectations. Revisions to the previous month were also negative, subtracting 40k units from October's transaction.

Existing home sales disappointed in November, with the resale activity sliding to its lowest level in 19 months. Most of the drop seems to be related to regulatory changes, specifically with the introduction of new rule "Know Before You Buy".

This notion is corroborated by a relatively steady level of pending home sales in November as well as a decline in the number of days a house spent on the market during the month. 

"As such, we expect the activity to surge in December, with readings becoming more comparable in the new year. For the year as a whole, existing sales are now expected to average 5.2m", says Economics TD. 

As volatility related to the new rule changes subsides, the moderate upturn in the resale activity will continue next year, supported by a recovering labor market, rising incomes, and improving household balance sheets.