Residential real estate is ready to turn the page on the slowest housing market for existing properties in nearly three decades.
Existing home sales hit its lowest level last year since 1995, according to a report from the National Association of Realtors. On an annual basis, there were 4.09 million existing home sales in 2023.
The lagging housing market reared its head again during the final month of the year. Sales of existing homes declined 1 percent from November, to a seasonally adjusted annual rate of 3.78 million for a 6.2 percent decline year-over-year.
The median sale price of existing homes rose 4.4 percent year-over-year in December to $382,600, marking a sixth month of annual price gains. The market peaked at $389,800 earlier in the year, a record for existing homes.
The report excludes new construction sales, which are pushing for more market share as inventory in the existing market remains low.
The market has reason for optimism. Mortgage rates have cooled from their October peak and rising builder activity and sentiment reported in December indicated inventory could bounce back from historically low levels.
“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” NAR chief economist Lawrence Yun said in a statement.
All-cash buyers continued their climb in market share, accounting for 29 percent of purchases last month, up 2 percentage points from November.
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All four regions tracked by NAR recorded year-over-year dips in home sales, but not all experienced the same month-to-month. In the West, sales jumped 7.8 percent from the last month, while sales plummeted 4.3 percent and 2.8 percent in the Midwest and South, respectively; sales didn’t change from the previous month in the Northeast.
For-sale inventory at the end of last month was 1 million homes, falling 11.5 percent from November, but up 4.2 percent year-over-year. Unsold inventory amounted to a 3.2-month supply at last month’s sales pace, down from November but up from a year ago.