December’s existing home sales was weak, much weaker than expected, down 6.4% for the month and 10.3% from a year ago. This has not been a very good year for existing home sales. The 2018 year matched the same number of homes sold in 2015.
The Fed in recent weeks has been talking down raising interest rates in 2019 from their previous stance of suggesting increasing them two more times. I wonder if the housing market had anything to do with their change. I think it has. The 30 year mortgage rate was at 5% at their last meeting and as soon as they changed their tone it fell to 4.5%. That is likely to help housing going forward.
There are a couple of reasons not to worry about housing; first, the job market is very strong. Second the millennials are staring to buy homes, and third inventory is falling. Add those three things with a mortgage rate at around 4.5% and housing, as it moves into the spring selling season should be fine, not great, but steady.