Existing home sales rebound from a 19-month low with the biggest gain ever

Existing home sales rebounded from a 19-month low in December, making 2015 the best year in nearly a decade.

Sales of existing condos, co-ops and single-family homes rose 14.7% at an annualized pace of 5.46 million, according to the National Association of Realtors — the largest monthly gain ever recorded.

Last year turned out to be the best for existing sales since 2006, before the housing market collapsed.

Economists had estimated that in December, existing sales rose 9.2% month-on-month at an annual rate of 5.20 million, according to Bloomberg.

A chunk of November sales were delayed until December due to the rollout of the Know Before You Owe initiative, according to the NAR. The initiative simplified the process that consumers go through to understand their mortgage options before closing a deal.

The median existing-home price in December was $224,100, up 8% year-over-year.

The share of first-time buyers rose to 32% in December from 29% in the prior year. NAR chief economist Lawrence Yun noted that although unaffordability and shrinking supply held back would-be first-time buyers last year and remain real issues in 2016, there should be mild improvement this year due to strong demand and a solid jobs market.

Overall, “the housing market will struggle in 2016 to replicate last year’s 7 per cent increase in sales,” Yun said, citing rising mortgage rates and low supply.

However, “with strong demand and low inventory, the housing market remains a seller’s market, which means home prices will continue to appreciate,” said Genworth Chief Economist Tian Liu in a note to us.

NOW WATCH: A law professor tricked his students into lying, which shows why you should never talk to police

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.