Home sales finished strong in December, helping make 2016 the best year for U.S. home sales since the recession, according to the January 2017 RE/MAX National Housing Report, an analysis of MLS data from 53 metro areas. In fact, home sales in 2016 were the highest in the housing report's eight-year history. Here are key points from January's report:
1. Homes are still selling fast
In December, homes spent an average of 62 days on the market. That's the shortest time of any December in the report's history.
2. Prices are rising
The median sales price of a home sold in December was $216,000. That was nearly 5 percent higher than the median sales price in December 2015.
3. Inventory continues to shrink
The inventory of homes for sale dropped nearly 18 percent between last December and December 2015, continuing a year-long streak of double-digit declines. Given the current pace of home sales, the inventory equals 4.2 months of sales. To put that in context, a supply of six months is considered a balanced market between buyers and sellers. In December, 47 of the 53 metro areas surveyed reported a supply of less than 6.0 months. That's usually considered a seller's market.
4. Slightly fewer transactions occurred
The overall average number of home sales fell 1.8 percent compared to December 2015. However, almost half of the 53 metro areas showed an increase in sales year-over-year. Growth in markets across the country was in the double digits. Home sales in the Wilmington/Dover, Delaware market shot up by about 21 percent. Sales in Honolulu, Hawaii grew by 19.7 percent and sales in Augusta, Maine, rose by about 16 percent.
What's the upshot of all this research? "Much like 2015, we saw a mostly healthy housing market in 2016 that posted steady growth in sales and prices," said Dave Liniger, RE/MAX CEO, chairman of the board and co-founder. "We're back to pre-recession levels in many markets, with 2017 forecast to be another solid year. We'll have to wait and see what impact rising interest rates will have." In December, the Federal Reserve raised interest rates for only the second time since 2006.
Dig into the details of the January 2017 RE/MAX National Housing Report in the infographic below. You can also read more on the RE/MAX Newsroom.