In economic news, existing home sales in December were up 3.6% to 5.54 million units from the prior month, topping November’s 5.35 million units. Year over year, existing sales were up 10.8%. Supply of existing homes remains extremely constrained at 3 months’ supply, down from November’s 3.7 months and is driving prices up even more. This is the lowest level of inventory on record.  A normal market is 6 month’s supply.  The median single-family home price increased 8.0% year over year. 

Perhaps the tight supply and high cost led to a decline in overall mortgage applications, which dropped 1.2% last week. Refinance as well as purchases both fell 2%, however, from the prior year are up 116% and 8%, respectively.