Existing-home sales retreated for the eleventh consecutive month in December, according to the National Association of REALTORS®’ (NAR) recent existing home sales report.
NAR’s latest data on existing homes found that total existing-home sales decreased 1.5% to 4.02 million, and YoY sales were down 34% from the 6.09 million last year. Three of the four major regions recorded month-over-month drops, while sales in the West were unchanged. In addition, all regions experienced year-over-year declines.
Key data points:
- Total housing inventory was 970,000 units, down 13.4% from November but up 10.2% from last year (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 last year.
- The median existing-home price was $366,900, up 2.3% from last year ($358,800). This marks 130 consecutive months of YoY increases, the longest-running streak on record.
- Properties typically remained on the market for 26 days, up from 24 days in November and 19 days last year, and 57% of homes sold were on the market for less than a month.
- First-time buyers were responsible for 31% of sales, up from 28% in November and 30% last year. NAR’s 2022 Profile of Home Buyers and Sellers found that the annual share of first-time buyers was 26%.
- All-cash sales accounted for 28% of transactions, up from 26% in November and 23% last year.
Single-family and condo/co-op sales:
- Single-family home sales declined to 3.60 million, down 1.1% from 3.64 million in November and 33.5% from last year. The median existing single-family home price was $372,700 in December, up 2% from last year.
- Existing condominium and co-op sales were at 420,000 units, down 4.5% from November and 38.2% from last year. The median existing condo price was $317,200, an annual increase of 3.3%.
Regional breakdown:
- Existing-home sales in the Northeast dropped 1.9% to 520,000, down 28.8% from last year. The median price was $391,400, an increase of 1.6% from last year.
- Sales in the Midwest fell 1% to 1.01 million, falling 30.3% from last year. The median price was $262,000, up 2.9% from last year.
- In the South, sales dropped 2.2% to 1.80 million, a 33.1% decrease from last year. The median price was $337,900, an increase of 3.5% from last year.
- Sales in the West were unchanged at 690,000, but down 43.4% from last year. The median price was $557,900, an increase of $200 from last year.
NAR Chief Economist Lawrence Yun commented:
“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates. However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.
“Home prices nationwide are still positive, though mildly. Markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year.
“Cash buyers are unaffected by fluctuations in mortgage rates and were able to take advantage of lower prices in some areas.”
Danielle Hale, chief economist at realtor.com®, commented:
“Despite lower mortgage rates toward the end of 2022, high home prices and concern for the economic and housing outlook kept buyers on the sidelines, leading to fewer transactions. However, the pull back from other buyers may have created an opportunity for some first-time homebuyers, whose share of purchases increased slightly to 31%, up from both November (28%) and December 2021 (30%).
“Most homeowners still have a significant equity cushion that should give them a good number of options if they are contemplating a sale. However, evaporating demand has ended the strong seller’s market of the past several years, and still-falling home sales tell us that many buyers are still not able to afford a purchase or not yet convinced that the market is tilted sufficiently in their favor to move forward. The housing market is entering ‘nobody’s market’ territory as buyers and sellers remain largely in a stalemate.
“Looking ahead, the stalemate won’t last forever. Buyer sentiment improved slightly in December as rates eased from a peak of nearly 7.1% early in November to roughly 6.3% by the end of the year. As inflation shows signs of declining, mortgage rates could move even lower. Additionally, housing data show that although nationwide prices continued to climb, some markets, particularly in the South and West, saw not only a seasonal retreat, but mild year-over-year declines in median home list prices. Further, as the number of homes on the market rose, sellers were twice as likely as last year to adjust their price lower. Buyers will still have to be mindful of costs, which continue to eat up a large share of their budget, but there are reasons why 2023 may offer opportunities. Renters hoping to become homeowners in 2023 may take advantage of the pockets of affordability identified in our Best Markets for First-Time Homebuyers in 2023, which are found in all four regions of the country with a heavy concentration in the Northeast.”
For the full report, click here.
