Home sales drop 6.4% in December

U.S. home sales cratered in December, causing price growth to slip to the lowest level in more than six years as the housing sector ended 2018 on a decidedly weak note.

The National Association of Realtors said Tuesday that sales of existing homes plunged 6.4 percent to a seasonally adjusted annual rate of 4.99 million last month, the worst pace in almost three years. For all of 2018, sales of existing homes fell 3.1 percent from a year ago to 5.34 million units, the weakest total since 2015.

“Looking ahead to 2019, expect weaker existinghomes sales as the new year ushered in a government shutdown and worsening economic uncertainty,” said Cheryl Young, a senior economist at Trulia.

The median sales price in December was $253,600, up just 2.9 percent from last year. In a rarity, the modest price growth was eclipsed by the December increase in average hourly wages. If income gains begin to outstrip home price growth, some of the recent affordability pressures could disappear.