Existing-home sales slipped in December to their lowest point since 1995.
Sales declined by 1% to a seasonally adjusted annual rate of 3.78 million, according to the latest data from the National Association of Realtors. They were down 6.2% from the same time last year.
The South and Midwest experienced declines month-over-month, while the Northeast saw effectively no change. Notably, sales in the West spiked by 7.8%. All regions clocked decreases YOY.
This is a turnaround from November, which saw sales increase for the first time in five months, and a break from predictions. Economists surveyed by The Wall Street Journal expected sales of previously owned homes would rise to a seasonally adjusted 0.3%.
NAR Chief Economist Lawrence Yun suggested that buyers can now see the light at the end of the tunnel, however.
“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” he said. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.”
Despite positive indicators on the construction front, Yun pointed to “unsustainable” home price appreciation as a major roadblock in 2024.
The median price for an existing home was up 4.4% YOY to $382,600, the sixth consecutive month of growth.
“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.”
Both renting and buying are a “financial stretch” for working Americans, according to ATTOM, but renting is the most affordable option.
Inventory of unsold homes fell by a striking 11.5% to 1 million units at the end of December, putting further pressure on house hunters. This is a 3.2-month supply at the current sales pace. Stock is up 4.2% YOY, however.
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