Existing Home Sales Drop 11th Straight Month
Existing home sales fell for the 11th straight month in December, the National Association of Realtors reported Friday—but the news wasn’t all that bad.
The report said total existing-home sales (https://www.nar.realtor/existing-home-sales) fell by 1.5% from November to a seasonally adjusted annual rate of 4.02 million in December. Year-over-year, sales fell by 34% (down from 6.09 million in December 2021).
Single-family home sales declined to a seasonally adjusted annual rate of 3.60 million in December, down 1.1% from 3.64 million in November and 33.5% from the previous year. The median existing single-family home price rose to $372,700 in December, up 2.0% from a year ago. Existing condominium and co-op sales fell to a seasonally adjusted annual rate of 420,000 units in December, down 4.5% from November and 38.2% from one year ago. The median existing condo price rose to $317,200 in December, an annual increase of 3.3%.
Regionally, sales in the Northeast slid 1.9% from November to an annual rate of 520,000 in December and fell by 28.8% from a year ago. The median price in the Northeast rose to $391,400, an increase of 1.6% from the prior year. sales in the Midwest fell 1.0% from November to an annual rate of 1.01 million in December and fell by 30.3% from one year ago. The median price in the Midwest rose $262,000, up 2.9% from December 2021.
In the South, sales slipped by 2.2% in December from November to an annual rate of 1.80 million and fell by 33.1% decrease from a year ago. The median price in the South rose to $337,900, an increase of 3.5% from a year ago. Sales in the West were unchanged at 690,000 from November but down 43.4% from one year ago. The median price in the West rose to $557,900, an increase of $200 from a year ago.
“While housing demand remains relatively depressed, lower mortgage rates and softer home price appreciation are likely starting to bring buyers off the sidelines,” said Charlie Dougherty, Economist with Wells Fargo Economics, Charlotte, N.C. “The leg down in financing costs looks to have boosted mortgage demand.”
But Dougherty noted shaky market conditions continue to discourage homeowners from putting their homes on the market. “Inventory remains significantly below levels leading up to the housing bust, when months’ supply peaked at just over 11 months,” he said.
“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.”
The report said total housing inventory at the end of December fell to 970,000 units, 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 rose to $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,” Yun added. “Markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year.”
The report said properties typically remained on the market for 26 days in December, up from 24 days in November and 19 days in December 2021. Fifty-seven percent of homes sold in December were on the market for less than a month.
First-time buyers represented 31% of sales in December, up from 28% in November and 30% in December 2021. All-cash sales accounted for 28% of transactions in December, up from 26% in November and 23% a year ago.
Individual investors or second-home buyers purchased 16% of homes in December, up from 14% in November but down from 17% in December 2021. Distressed sales represented 1% of sales in December, unchanged from last month and one year ago.