Existing Home Sales Reach Highest Levels Since 2006

Existing home sales resumed an upward trajectory in December. After drifting lower by 2.5 percent in November, breaking a five-month streak of gains, the National Association of Realtors® (NAR) said sales in the last month of the year rose 0.7 percent. Sales of single-family homes, townhomes, condominiums, and co-ops, were at a seasonally adjusted annual rate of 6.76 million during the month, compared to 6.69 million units in November. This represented a 22.2 percent increase over the 5.53 million unit rate a year earlier. The numbers were above the 6.40 million to 6.62 million range of forecasts by analysts polled by Econoday. Their consensus was for an annual rate of 6.55 million units.

Upbeat 2021 Econ Forecast From Fannie Mae

Optimism is running high in Fannie Mae's first Economic and Housing Outlook of the year. The company's Economic and Strategic Research (ESR) team says expanding vaccination efforts, the potential of greater than previously expected fiscal stimulus, and the end of winter all "point to an economy ready to take off once COVID-19-related effects begin to subside." The company says that economic growth probably flatlined in November and December and it revised its final GDP estimate for the year down to a negative 2.7 percent. The economy is now poised to expand, although probably not before late spring. The ESR team has raised its expectations for 2121 from 4.5 percent growth in last month's report to 5.3 percent and by 0.4 points for 2022 to 3.6 percent.  

End-of-Year Delinquencies a Challenge for 2021

Mortgage performance understandably deteriorated over the course of 2020. Black Knight, in its "first look" at December data, noted that the year ended with 1.54 million more delinquent mortgages and 1.7 million more that were seriously delinquent than at the start, calling it "a looming reminder of the challenges facing the market in 2021." The situation did continue to improve as the year ended. The national delinquency rate fell 3.9 percent from November to December and the resulting rate of 6.08 percent of all active loans was the lowest since April 2020 when the financial effects of the pandemic kicked in. It is however, nearly 79 percent higher than the rate at the end of 2019. Serious delinquencies, loans 90 or more days past due but not in foreclosure, also declined, dropping by 47,000 loans to 2.146 million loans. In December 2019 there were 1.719 million such loans.