December existing-home sales down slightly, 1.5% lower than November

By Craig Wales on 1/20/2023

Tags: market update

In a month that’s traditionally the slowest of the year, it’s not surprising that existing-home sales lagged in December for the 11^th consecutive month. Three of the four major regions across the U.S. saw a slight decrease according to the latest existing-home sales report from the National Association of Realtors® (NAR). Total existing-home sales were down 1.5% from November.

All four regions saw declines in existing-home sales activity in December from the year before, but activity was similar to where it was in November, if slightly lower:

Northeast: Down 1.9% to an annual rate of 520,000, down 28.8% from December 2021
Midwest: Down 1.0% to an annual rate of 1,010,000, down 30.3% from December 2021
South: Down 2.2% to an annual rate of 1,800,000, down 33.1% from December 2021
West: Unchanged at 0.0% with an annual rate of 690,000, down 43.4% from December 2021

“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said Lawrence Yun, Chief Economist at NAR. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”

Have we hit bottom and poised to move up?

It’s notable that purchase activity was only slightly down from November, during the slowest month of the year. As rates have been hovering in the mid-6% range for much of December, it feels like more buyers were in the market than would be expected. Overall, existing-home sales reached 5.03 million in 2022, which was down 17.8% from the heyday of the pandemic-fueled housing market of 2021.

Month	Month-over-month	Year-over-year	Seasonally Adjusted Annual Rate
January	Up 6.7%	Down 2.3%	6.5 million
February	Down 7.2%	Down 2.4%	6.02 million
March	Down 2.7%	Down 4.5%	5.77 million
April	Down 2.4%	Down 5.9%	5.61 million
May	Down 3.4%	Down 8.6%	5.41 million
June	Down 5.4%	Down 14.2%	5.12 million
July	Down 5.9%	Down 20.2%	4.81 million
August	Down 0.4%	Down 19.9%	4.80 million
September	Down 1.5%	Down 23.8%	4.71 million
October	Down 5.9%	Down 28.4%	4.43 million
November	Down 7.7%	Down 35.4%	4.09 million
December	Down 1.5%	Down 34.0%	4.02 million

Home prices coming down

The median single-family home price in December came in at $366,900, slightly lower than the $370,700 mark in November. This was the sixth straight month of home price decreases, good news for home affordability. This marks an increase of 2.3% from December 2021, an amazing 130^th consecutive month of year-over-year increases.

"Home prices nationwide are still positive, though mildly,” Yun notes. “Markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year.”

Month	Median existing-home price	Month-over-month	Year-over-year
January	$350,300	Down 2.2%	Up 15.4%
February	$357,300	Up 2.0%	Up 15.0%
March	$375,300	Up 5.0%	Up 15.1%
April	$391,200	Up 4.2%	Up 10.8%
May	$407,600	Up 4.2%	Up 14.8%
June	$416,000	Up 2.1%	Up 13.4%
July	$403,800	Down 2.9%	Up 10.8%
August	$389,500	Down 3.5%	Up 7.7%
September	$384,800	Down 1.2%	Up 8.4%
October	$379,100	Down 1.5%	Up 6.6%
November	$370,700	Down 2.2%	Up 3.5%
December	$366,900	Down 1.0%	Up 2.3%

Housing inventory was down 13.4% from November at 970,000 units. However, that is up 10.2% from December of last year. That represent a 2.9-month supply of unsold inventory at the current sales pace, up from 1.7-month supply in December of last year. Properties are sitting on the market for 26 days on average, up from 24 days in November and 19 days from December 2021. That’s great news for buyers who won’t have to deal with a highly competitive market like they saw over the last few years.

Source: https://www.nar.realtor/newsroom/existing-home-sales-receded-1-5-in-december