In December, existing-home sales took a step back, as reported by the National Association of REALTORS®. While the Midwest and South saw a decline in sales, the West experienced an increase, and the Northeast remained unchanged. All four regions witnessed a decrease in sales compared to the previous year.
On an annual basis, existing-home sales dropped to their lowest level since 1995, with a total of 4.09 million sales. However, the median price reached a record high of $389,800 in 2023.
The total number of existing-home sales, including single-family homes, townhomes, condominiums, and co-ops, decreased by 1.0% from November to a seasonally adjusted annual rate of 3.78 million in December. Compared to December 2022, sales declined by 6.2% from 4.03 million.
NAR Chief Economist Lawrence Yun expressed optimism, stating, “The latest month’s sales appear to be the bottom before inevitably rebounding in the new year. Mortgage rates have significantly decreased in the past two months, and we anticipate more inventory entering the market in the coming months.”
At the close of December, the total number of available homes for sale stood at 1 million units, marking an 11.5% decrease from November. However, compared to the previous year, there was a 4.2% increase in inventory. The unsold homes supply currently stands at 3.2 months, reflecting a decline from 3.5 months in November but an improvement from 2.9 months in December 2022.
In terms of pricing, the median existing-home price for all housing types in December reached $382,600, showing a 4.4% rise from December 2022, which recorded a price of $366,500. Notably, all regions across the United States experienced price increases.
Despite the somewhat sluggish pace of home sales, there is a silver lining. Around 85 million households who own homes have witnessed further growth in their housing wealth. However, it is crucial to acknowledge that the rapid surge in home prices over the past three years is not sustainable. If this trend persists, it could lead to a significant divide between those who have access to homeownership and those who do not. To address this issue, it is essential to focus on creating opportunities for today’s renters to become homeowners. This requires fostering economic and income growth, as well as steadily increasing home construction.
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