Existing home sales in the U.S. unexpectedly rebounded in the month of December, according to a report released by the National Association of Realtors on Friday.
NAR said existing home sales climbed by 0.7 percent to an annual rate of 6.76 million in December after tumbling by 2.2 percent to a revised rate of 6.71 million in November.
The rebound surprised economists, who had expected existing home sales to slump by 2.1 percent to a rate of 6.55 million from the 6.69 million originally reported for the previous month.
With the unexpected monthly increase, existing home sales in December were up by 22.2 percent compared to the same month a year ago.
"Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic," said Lawrence Yun, NAR's chief economist.
He added, "What's even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market."
The report said the existing home price for all housing types was $309,800 in December, up 2.9 percent year-over-year.
Housing inventory at the end of December totaled 1.07 million units, down 16.4 percent from November. The unsold inventory represents an all-time low of 1.9 months of supply at the current sales pace.
Looking ahead, Yun expects to see a continuation of the strong activity that's currently taking place in the housing market and in the overall economy.
"Although mortgage rates are projected to increase, they will continue to hover near record lows at around 3%," Yun said.
He added, "Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway."
Next Thursday, the Commerce Department is expected to release a separate report on new home sales in the month of December.
Economists currently expect new home sales to jump by 2.7 percent in December after plunging by 11.0 percent in November.