Sales of existing homes fell for the 11th consecutive month in December, according to a report released Friday by the National Association of Realtors (NAR).
Three of the four major U.S. regions reported month-over-month drops, while sales in the West were unchanged, the NAR said. All regions experienced year-over-year declines.
Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums, and co-ops — decreased 1.5% from November to a seasonally adjusted annual rate of 4.02 million in December. Year-over-year, sales fell 34%, down from 6.09 million in December 2021.
For the year, sales totaled 5.03 million, down 17.8% from 2021, as last year’s rapidly rising interest rate environment depressed the residential real estate market.
“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said NAR Chief Economist Lawrence Yun. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”
The housing inventory at the end of December was 970,000 units, down 13.4% from November but up 10.2% from 880,000 a year earlier. Unsold inventory was at a 2.9-month supply at the current sales pace, down from 3.3 months in November but up from 1.7 months in December last year.
The median existing-home price for all housing types in December was $366,900, up 2.3% from $358,800 a year earlier, as prices increased in all regions. It marked 130 consecutive months — or 10 years and 10 months — of year-over-year increases, the longest streak on record.
“Home prices nationwide are still positive, though mildly,” Yun said. “Markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year.”
Properties typically remained on the market for 26 days in December, up from 24 days in November and 19 days in December 2021. Of the homes sold in December, 57% were on the market for less than a month.
First-time buyers were responsible for 31% of sales in December, up from 28% in November and 30% in December 2021. NAR’s 2022 Profile of Home Buyers and Sellers — released in November 20224 — found that the annual share of first-time buyers was 26%, the lowest since it began tracking the data.
All-cash sales accounted for 28% of transactions in December, 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 buyers, who make up many cash sales, purchased 16% of homes in December, up from 14% in November but down from 17% in December 2021.
Distressed sales — foreclosures and short sales — represented 1% of sales in December, virtually unchanged from last month and a year earlier.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.15% as of Jan. 19, down from 6.33% last week, but up from 3.56% one year ago.
Single-family, Condo/Co-op Sales
Single-family home sales declined to a seasonally adjusted annual rate of 3.6 million in December, down 1.1% from November and 33.5% from the previous year. The median existing single-family home price was $372,700 in December, up 2% from a year earlier.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 420,000 units in December, down 4.5% from November and 38.2% from a year ago. The median existing condo price was $317,200 in December, an annual increase of 3.3%.
Regional Breakdown
- Existing-home sales in the Northeast slid 1.9% from November to an annual rate of 520,000 in December, down 28.8% from December 2021. The median price in the Northeast was $391,400, up 1.6% from a year earlier.
- Sales of existing homes in the Midwest fell 1% from November to an annual rate of 1.01 million in December; that was down 30.3% from a year earlier. The median price in the Midwest was $262,000, up 2.9% from December 2021.
- In the South, existing-home sales slipped 2.2% in December from November to an annual rate of 1.80 million, a 33.1% decrease from the previous year. The median price in the South was $337,900, an increase of 3.5% from this time last year.
- At an annual rate of 690,000, existing-home sales in the West were unchanged from November but down 43.4% from one year ago. The median price in the West was $557,900, an increase of $200, or less than a tenth of a percent from December 2021.
The National Association of Realtors is America’s largest trade association, representing more than 1.5 million members.
