The number of homes available for sale contracted in December 2017, suggesting inventory shortages will persist as higher rates discourage homeowners from moving.

Homes for sale, including new listings, totaled 568,000 during the month. That figure was down by 14% month-over-month and year-over-year, according to online real estate brokerage Redfin.

There were 147,100 new listings in December 2017, down almost 30% from the previous month and 3% from December 2016.

Inventory keeps contracting

The market in December of last year also saw a slight decline in supply. At 2.6 months, this represented a 0.4% decrease from the previous month and a year ago.

"Like last year, low inventory will be the biggest driver of the 2018 real estate market. Major housing market dynamics don't shift dramatically when the clock strikes midnight on Jan. 1," said Redfin Chief Economist Nela Richardson in a press release.

"We anticipate a continuation of the same trends we've been seeing for the past few years. Price growth will remain strong as many homeowners will remain deterred from selling due to the low mortgage rates they've locked in and the high price of their would-be move-up home."

The median sales price in December 2017 declined slightly month-over-month by 1.3% to $286,700, but it was up 6.8% year-to-year. More than 20% of sales sold above their listing price.

Homes sold during the month totaled 218,700, which represented a 0.5% decline from the consecutive month and a 2.4% drop from December 2016.

The median days on the market for a house sold in December of last year was 49, up from 45 in November 2017 but down from 54 in December 2016.

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