- REUTERS/Shannon Stapleton
Data on US new-home sales released Thursday confirmed that 2016 was the best year for the housing market since the financial crisis.
Although sales slumped in December – by 10.4% at a seasonally adjusted annual rate of 536,000 – new home sales for the year 2016 were at the strongest level since 2007.
Also, data from the National Association of Realtors on Tuesday showed that in 2016, existing home sales were at the strongest level since 2006.
Interest rates are still near historical lows, and served as one draw for prospective homebuyers last year.
“We expect the upcoming year to bring both headwinds and tailwinds,” said Ralph McLaughlin, Trulia’s chief economist, in a note. “While higher mortgage rates blow strongly into the face of homebuyers, low existing inventory, near full employment, and rising wages are strong tailwinds that will continue to push new home sales higher in the year ahead.”
Tight housing inventory, the recent rise in mortgage rates, and freezing weather may have contributed to the drop in new home sales in December.
“Combined with missed expectations for existing home sales data earlier this week, 2017 so far doesn’t seem to be shaping up to be a banner year for homebuyers,” said Svenja Gudell, Zillow’s chief economist, in a note.