Residential property sales in the US reached the highest level for 10 years in 2016 driven by home demand and interest from overseas property investors.
Although property sales actually dipped slightly during December, the 0.7 per cent year on year rise in that month was still enough to end 2016 as the highest residential property sales year since 2006.
According to the latest data from the National Association of Realtors (NAR), annual property sales in the US rose from 5.25 million in 2015 to 5.45 million in 2016.
This represented the highest level of real estate sales since the 6.48 million seen in 2006, before the global financial crisis.
Average property prices were also up in 2016 compared to 2015, with the average price across all residential property types up $1,000 to $223,200 from December 2015. An average increase of 4 per cent.
A shortage of available property in the US has also helped to keep price levels strong. The end of 2016 saw total housing inventory fall by 10.8 per cent.
With only 1.65 million properties available for sale inventory is at the lowest level since the National Association of Realtors began tracking the level of supply in 1999. Available property inventory has now fallen for 19 consecutive months.
Lawrence Yun, NAR chief economist, commented: ‘Solid job creation throughout 2016 and exceptionally low mortgage rates translated into a good year for the housing market.’
He continued: ‘Housing affordability for both buying and renting remains a pressing concern because of another year of insufficient home construction.’
It seems that the rising price of real estate in the US, coupled with rising interest rates, makes property increasingly unaffordable for US buyers. This can create an even stronger private rental sector across the states and may attract further overseas property investors to invest in America.