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Existing home sales ended 2023 on a downturn, according to data from the National Association of Realtors (NAR).

Total existing home sales dipped by 1% from November to a seasonally adjusted annual rate of 3.78 million in December. On a year-over-year measurement, sales dropped by 6.2% 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.”

The median existing home price for all housing types in December was $382,600, an increase of 4.4% from the $366,500 recorded one year earlier. Total housing inventory registered at the end of December was 1 million units, down 11.5% from November but up 4.2% from one year ago. Unsold inventory was 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.

“Despite sluggish home sales, 85 million homeowning households enjoyed further gains in housing wealth,” Yun stated. “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.”

 

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