NAR: Existing-home Sales Fell 1.5% in December

According to the National Association of Realtors, existing-home sales fell for the eleventh month in a row in December.

Three of the four major U.S. regions experienced month-over-month declines, while sales in the West were constant. All regions had year-over-year decreases.

Total existing-home sales, which include single-family homes, townhomes, condominiums, and co-ops, fell 1.5% in December from November to a seasonally adjusted annual pace of 4.02 million. Sales fell 34.0% year on year (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,” NAR Chief Economist Lawrence Yun stated.

“However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”

The total housing inventory2 registered at the end of December was 970,000 units, a 13.4% decrease from November but a 10.2% increase from the previous year (880,000). At the current sales rate, unsold inventory has a 2.9-month supply, down from 3.3 months in November but up from 1.7 months in December 2021.

The median existing-home price3 for all property types in December was $366,900, up 2.3% from December 2021 ($358,800), with prices rising across the board. This is the longest-running streak of year-over-year gains on record, at 130 months.

“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.”

Properties were on the market for an average of 26 days in December, up from 24 days in November and 19 days in December 2021. In December 2022, 57% of homes sold were on the market for less than a month.

First-time purchasers accounted for 31% of December transactions, up from 28% in November and 30% in December 2021. According to the National Association of Realtors’ 2022 Profile of Home Purchasers and Sellers, which was released in November 20224, the annual share of first-time buyers was 26%, the lowest since NAR began recording the data.

In December, all-cash sales accounted for 28% of transactions, 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,” Yun said.

Individual investors or second-home purchasers acquired 16% of properties in December, up from 14% in November but down from 17% in December 2021.

Distressed sales5 – foreclosures and short sales – accounted for 1% of sales in December, remaining almost unchanged from the previous month and year ago.

As of January 19, the 30-year fixed-rate mortgage (link is external) averaged 6.15%, according to Freddie Mac. This is a decrease from 6.33% last week, but an increase from 3.56% a year ago.

Single-family and Condo/Co-op Sales

Single-family house sales fell to 3.60 million in December, a 1.1% decrease from 3.64 million in November and a 33.5% decrease from the previous year. In December, the typical existing single-family home price was $372,700, up 2.0% from December 2021.

Existing condominium and co-op sales totaled 420,000 units in December, a 4.5% decrease from November and a 38.2% decrease from the previous year. In December, the typical existing condo price was $317,200, representing a 3.3% yearly increase.

“Realtors helped millions of Americans achieve the dream of homeownership in the midst of a housing market that experienced some tough headwinds last year,” said NAR President Kenny Parcell, a Spanish Fork, Utah-based Realtor and broker-owner of Equity Real Estate Utah..

“In 2023, we’ll continue to work with legislators and real estate leaders at all levels to address inventory shortages and increase access to homeownership.”

Regional Breakdown

• Northeast: Existing-home sales in the Northeast fell 1.9% from November to 520,000 in December, a 28.8% decrease from December 2021. The median price in the Northeast was $391,400, up 1.6% from the previous year.
• Midwest: In December, existing-home sales in the Midwest declined 1.0% from the previous month to an annual rate of 1.01 million, a 30.3% decrease from the previous year. In the Midwest, the median price was $262,000, up 2.9% from December 2021.
• South: Existing-home sales in the South fell 2.2% from November to an annual rate of 1.80 million, a 33.1% fall from the previous year. In the South, the median price was $337,900, up 3.5% from this time last year.

Existing-home sales in the West were flat from November at 690,000, but down 43.4% from a year ago. The median price in the West was $557,900, up $200, or less than 10 percent, from December 2021.

The National Association of Realtors is America’s largest trade association, with over 1.5 million members working in all facets of residential and commercial real estate. The term Realtor is a recognized collective membership mark that distinguishes a real estate agent who belongs to the National Association of Realtors and follows its stringent Code of Ethics.