Lowest Existing Home Sales Since 1995

Introduction

In a recent report by the National Association of REALTORS® (NAR), December 2023 witnessed a significant decline in existing-home sales across the United States. This downturn marks the lowest sales rate since 1995. Despite this, the median home price soared to an unprecedented high last year.

Decline in Home Sales

The latest NAR data indicates a 1.0% decrease in existing-home sales in December compared to November, settling at a seasonally adjusted annual rate of 3.78 million. This represents a 6.2% drop from December 2022’s figures. Regional analysis shows varied trends, with sales dipping in the Midwest and South, increasing in the West, and remaining stable in the Northeast.

Record-High Median Prices

Contrasting the sales slump, 2023’s median home price hit a record-breaking $389,800. December alone saw a median price of $382,600, a 4.4% increase from the previous year. All four major U.S. regions experienced this upward price trajectory.

Market Outlook and Realtor Insights

NAR’s Chief Economist, Lawrence Yun, predicts a potential market recovery in the new year. Factors like lower mortgage rates and an anticipated increase in housing inventory could stimulate the market. Yun also emphasizes the growing disparity in housing wealth and the need for strategies to aid renters in becoming homeowners.

Housing Inventory and Mortgage Rates

December ended with a total housing inventory of 1 million units. While this is an 11.5% drop from November, it’s a 4.2% increase from the previous year. Mortgage rates, as reported by Freddie Mac, averaged 6.60% as of mid-January 2024.

Sales Breakdown and Buyer Profiles

The report highlights that single-family home sales slightly decreased, while condo and co-op sales saw a more substantial drop. First-time buyers accounted for 29% of December sales, a slight decrease from previous months. Cash sales comprised 29% of the transactions, reflecting a steady interest from investors and second-home buyers.

Regional Sales Overview

The Northeast region maintained its sales rate, while the Midwest experienced a significant decline. The South saw a modest decrease, and the West reported an increase in sales. Despite varying sales figures, all regions saw an increase in median home prices.

NAR and the Real Estate Market

NAR, representing over 1.5 million members in the real estate sector, continues to be a primary source for national and regional real estate trends. Their comprehensive data offers insights into the ongoing changes in the housing market.

Conclusion

The real estate market of 2023 ended on a nuanced note, with a historic dip in sales but a surge in median home prices. The future trajectory of the housing market remains closely tied to economic factors, inventory changes, and mortgage rates. For more localized data, NAR advises consulting local MLS sources.