NAR’s chief economist said December sales “look to be the bottom before inevitably turning higher in the new year” on lower mortgage rates and increasing inventory.
WASHINGTON — Existing-home sales slid in December, according to the National Association of Realtors®. Among the four major U.S. regions, sales slipped in the Midwest and South, rose in the West and were unchanged in the Northeast. All four regions experienced year-over-year sales decreases.
On an annual basis, existing-home sales (4.09 million) dropped to the lowest level since 1995, while the median price reached a record high of $389,800 in 2023.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – decreased 1.0% from November to a seasonally adjusted annual rate of 3.78 million in December. Year-over-year, sales declined 6.2% (down from 4.03 million in December 2022).
“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.”
Total housing inventory registered at the end of December was one million units, down 11.5% from November but up 4.2% from one year ago (960,000). Unsold inventory sits at a 3.2-month supply at the current sales pace, down from 3.5 months in November but up from 2.9 months in December 2022.
The median existing home price for all housing types in December was $382,600, an increase of 4.4% from December 2022 ($366,500). All four U.S. regions posted price increases.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.60% as of January 18. That’s down from 6.66% the prior week but up from 6.15% one year ago.
“Despite sluggish home sales, 85 million homeowning households enjoyed further gains in housing wealth,” Yun added. “Obviously, the recent, rapid three-year rise in home prices is unsustainable. If price increases continue at the current pace, the country could accelerate into haves and have-nots. Creating a path towards homeownership for today’s renters is essential. It requires economic and income growth and, most importantly, a steady buildup of home construction.”
Other notable takeaways from December:
- According to the monthly Realtors Confidence Index, properties typically remained on the market for 29 days in December, up from 25 days in November and 26 days in December 2022. Fifty-six percent of homes sold in December were on the market for less than a month.
- First-time buyers were responsible for 29% of sales in December, down from 31% in November 2023 and December 2022. NAR’s 2023 Profile of Home Buyers and Sellers – released in November 2023 – found that the annual share of first-time buyers was 32%.
- All-cash sales accounted for 29% of transactions in December, up from 27% in November 2023 and 28% in December 2022.
- Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in December, down from 18% in November and identical to one year ago.
- Distressed sales – foreclosures and short sales – represented 2% of sales in December, virtually unchanged from last month and the previous year.
Single-family and Condo/Co-op Sales
- Single-family home sales edged lower to a seasonally adjusted annual rate of 3.4 million in December, down 0.3% from 3.41 million in November and 6.1% from the previous year. The median existing single-family home price was $387,000 in December, up 4.0% from December 2022.
- Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 380,000 units in December, down 7.3% from November and one year ago (both 410,000 units). The median existing condo price was $343,800 in December, up 8.2% from the previous year ($317,700).
Regional Breakdown
- Existing-home sales in the South descended 2.8% from November to an annual rate of 1.72 million in December, a decrease of 4.4% from the prior year. The median price in the South was $352,100, up 3.8% from one year ago.
- At 470,000 units, existing-home sales in the Northeast were unchanged from November but down 9.6% from December 2022. The median price in the Northeast was $428,100, up 9.4% from the previous year.
- In the Midwest, existing-home sales retracted 4.3% from the prior month to an annual rate of 900,000 in December, down 10.9% from last year. The median price in the Midwest was $275,600, up 5.9% from December 2022.
- In the West, existing-home sales grew 7.8% from a month ago to an annual rate of 690,000 in December but were down 1.4% from one year before. The median price in the West was $582,000, up 4.8% from December 2022.
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