Existing-home sales declined for the eleventh consecutive month in December, according to the National Association of Realtors.
Three of the four major U.S. regions, including the Midwest, recorded month-over-month drops, while sales in the West were unchanged. All regions experienced year-over-year declines.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – decreased 1.5% from November to a seasonally adjusted annual rate of 4.02 million in December. Year-over-year, sales sagged 34% (down from 6.09 million in December 2021).
“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said NAR chief economist Lawrence Yun. “However, expect sales to pick up again soon, since mortgage rates have markedly declined after peaking late last year.”
Total housing inventory registered at the end of December was 970,000 units, which was down 13.4% from November but up 10.2% from one year ago (880,000). Unsold inventory sits at a 2.9-month supply at the current sales pace, down from 3.3 months in November but up from 1.7 months in December 2021.
The median existing-home price for all housing types in December was $366,900, an increase of 2.3% from December 2021 ($358,800), as prices rose in all regions. This marks 130 consecutive months of year-over-year increases, the longest-running streak on record.
“Home prices nationwide are still positive, though mildly,” Mr. Yun added. “Markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year.”
Properties typically remained on the market for 26 days in December, up from 24 days in November and 19 days in December 2021. Overall, 57% of homes sold in December 2022 were on the market for less than a month.
First-time buyers were responsible for 31% of sales in December, up from 28% in November and 30% in December 2021. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 28% of transactions in December, up from 26% in November and 23% in December 2021.
“Cash buyers are unaffected by fluctuations in mortgage rates and were able to take advantage of lower prices in some areas,” Mr. Yun said.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in December, up from 14% in November but down from 17% in December 2021.
