Existing home sales fall to lowest level since 1995

However, the year-over-year decrease continues to decline overall, with all four regions also posting price increases

WASHINGTON — Existing home sales fell again in December, reaching what the National Association of Realtors described as the lowest level on an annual basis since 1995.

According to the National Association of Realtors, home sales fell 6.2% from December 2022 and 1% from November.

Existing home sales totaled 3.79 million, a 6.2% drop from 4.03 million in December 2022. The percentage decrease marks a slight improvement in November year-over-year sales, whose 7.3% decline was about half the 14.6% year-over-year decline in October and also much less than some previous double-digit declines throughout 2023.

“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” said NAR chief economist Lawrence Yun, adding that “mortgage rates are meaningfully lower compared to just two months ago and more inventory is expected to appear on the market in upcoming months.”

The report covers home sales that include single-family homes, townhomes, condominiums and co-ops. The median existing home sale price for all housing types was $382,600 in December, up 4.4% from the $366,500 in December 2022, with all four regions posting price increases. The median price for all of 2023 reached a record high of $389,800.

“Despite sluggish home sales, 85 million homeowning households enjoyed further gains in housing wealth,” Yun said, adding that the “rapid three-year rise in home prices is unsustainable. If price increases continue at the current pace, the country could accelerate into the haves and have-nots. Creating a path toward homeownership for today’s renters is essential. It requires economic and income growth and, most importantly, a steady buildup of home construction.”

By region the activity was as follows:

+ In the Northeast, there were 470,000 existing home sales in December, down 9.6% from December 2022 and unchanged from November. The median existing home price was $428,100, up 9.4% from a year earlier.

+ In the Midwest, existing home sales totaled 900,000 in December, down 10.9% from December 2022 and down 4.3% from November. The median price in the region was $275,600, up 5.9% from December 2022.

+ In the South, there were 1.72 million existing homes sold in December, down 4.4% from the previous year and down 2.8% from November. The median home price was $352,100, up 3.8% from December 2022.

+ In the West, there were 690,000 existing homes sold, down 1.4% from December 2022 but up 7.8% from November. The median price in the region was $582,000, up 4.8% from the previous December.

Other highlights of the report were as follows:

+ Single-family home sales totaled 3.4 million in December, down 6.1% from the prior year and down .3% from the 3.41 million sold in November. The median single-family home price was $387,000, up 4% from December 2022.

+ Condominium and co-op sales totaled 380,000 in December, down 7.3% from the 410,000 in both December 2022 and November. The median existing condominium price was $343,800, which was up 8.2% from December 2022.

+ Total housing inventory at the end of December was 1 million units, up 4.2% from the 960,000 recorded in December 2022 and down 11.5% from November. Unsold inventory is at a 3.2-month supply at the current rate of sale, down from 3.5 months in November and up from 2.9 months in December 2022.

+ First-time buyers represented 29% of sales in December, which was down from 31% from December 2022 and November. The annual share of first-time buyers was 32%.

+ All cash sales represented 29% of transactions in December, up 28% from December 2022 and up 27% from November. Individual investors or second-home buyers that make up many cash sales purchased 16% of homes in December, which was unchanged from the previous year but down from 18% in November.

+ Distressed sales, including foreclosures and short sales, represented 2% of sales in December, unchanged from December 2022 and November.

+ The 30-year fixed rate mortgage averaged 6.6% as of Jan. 18, which was up from 6.15% a year ago.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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