Existing Home Sales Take a Steep Dive in December to Hit 12-Year Low

In the U.S., sales of previously owned houses dropped a lot in 2023, hitting their lowest level in almost 30 years. Existing house sales dropped 1% from November to December, according to the National Association of Realtors (NAR). They reached a seasonally adjusted annual rate of 3.78 million units, which was the slowest sales pace since August 2010.

In 2023, sales for the whole year were 4.09 million units, which was the lowest number since 1995 and a big 18.7% drop from 2022. This drop was caused by a number of things, such as rising mortgage rates, a lack of homes for sale, and rising real estate prices.

High mortgage rates and rising home prices have made it harder and harder for many Americans to become landlords. In December, the median home sales price across the country went up 4.4% from the previous year to $382,600. For the whole year, the median home price across the country went up just under 1% to a record high of $389,000.

Home prices were also affected by the lack of availability. In December, the median price of a home sold went up because there were not enough homes to go around for 3.2 months at the current sales rate.

There were different parts of the housing market that were affected by these trends. Sales of homes between $250,000 and $500,000 went down by 7%, but sales of homes over $1 million went up by 14%.

Only 29% of December buys were made by first-time buyers, down from 31% the previous year. This is because it’s already hard for first-time buyers to get into the market.

Also, only 29% of homes were bought by individual owners or second-home buyers in December, up from 18% in November. These buyers usually make up most cash sales.

In the near future, there is cautious hope that the housing market might get better. By the end of the year, economists think that mortgage rates will stay just above 6%. In the next few months, more homes will likely come on the market.

The top economist for the NAR said that this month’s sales seem to be the lowest they’ll be before going up again in the new year. He said this because mortgage rates have dropped significantly since two months ago.

In conclusion, the real estate market had a lot of problems in 2023, which is why sales of current homes were the lowest they had been in almost 30 years. It was hard for both buyers and sellers because mortgage rates were going up, there weren’t many homes for sale, and prices were going up.

As the market looks to the future, there is hope for a possible comeback, which will be helped by lower mortgage rates and more homes on the market.