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U.S. Existing-Home Sales Rebound in December

Existing-home sales rose 14.7% from November, the National Association of Realtors said

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A woman arrived for an open house in Redondo Beach, Calif. last year.

PATRICK T. FALLON/BLOOMBERG NEWS
A woman arrived for an open house in Redondo Beach, Calif. last year.
PATRICK T. FALLON/BLOOMBERG NEWS

WASHINGTON—The U.S. housing market wrapped up its best year since before the recession with a big rebound in sales, a sign of strength for a key sector of the economy. Existing-home sales rose 14.7% in December from the prior month to a seasonally adjusted annual rate of 5.46 million, the National Association of Realtors said on Friday. Economists surveyed by The Wall Street Journal had expected existing home sales of 5.3 million. Inventory of existing homes for sale fell 12% to 1.79 million. At 3.9 months’ worth of supply, inventories are at the lowest level in nearly a decade.

The national median home price rose to $224,100, up 7.6% from a year earlier. For all of 2015, existing-home sales reached 5.26 million, the highest level since 2006, capping off a long but slow recovery following the housing bust. The revival has helped boost the economy. But rising demand for housing also has led to limited supplies and growing prices in some markets, challenging many buyers. New-home construction hasn’t been able to keep up. Lawrence Yun, NAR’s chief economist, called the price gains “an unhealthy trend, an unsustainable trend” and highlighted that the rapid rise in costs has been outstripping income gains for many Americans. For 2016, Mr. Yun is forecasting relatively flat sales amid tight supplies and broader economic turbulence. Still, he expects the U.S. to weather the latest market volatility. “It is very rare when the housing market is recovering to have a recession,” he said. Existing-home sales had dipped in November, a development the NAR blamed largely on closing delays caused by new federal rules implemented by the Consumer Financial Protection Bureau in October. The new rules, prompted by the 2010 Dodd-Frank financial law, are meant to help consumers better understand the terms of their mortgages before they sign. December’s strong rebound in sales, the biggest monthly gain on record, was partly catch-up from November’s rule-related delays, NAR said. Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com and David Harrison at david.harrison@wsj.com This article originally appeared on The Wall Street Journal.