KEY POINTS
  • Demand is surging because mortgage rates are about a full percentage point lower than they were a year ago, and the largest generation, millennials, are aging into their homebuying years.
  • That demand pushed the supply of homes for sale down 8.5% annually to the lowest level since the Realtors began tracking inventory in 1982.
  • The huge imbalance between supply and demand caused the median home price in December to jump 7.8% annually, the biggest annual increase in almost four years.
A worker stands on the roof of a home under construction at a new housing development in San Rafael, California.

Buyers are trolling the nation's neighborhoods looking for homes at the fastest pace in nearly two years, making an already critical shortage of inventory even worse.

Sales of existing homes rose a steeper-than-expected 3.5% in December compared with January, according to the National Association of Realtors.