2023 Marks Lowest Existing Home Sales Since 1995

Existing home sales ended 2023 at a 28-year low, according to the National Association of Realtors (NAR).

Declining affordability and tight inventory, further squeezed by higher interest rates, were the main culprits.

However, a recent decline in mortgage rates and improving inventory offer glimmers of hope for a busier spring market.

Key Highlights:

• December saw a 1.0% drop in existing home sales, bringing the annualized rate to 3.78 million, a 6.2% decline year-over-year and a whopping 19% dip compared to 2022.
• Despite the sales slowdown, the median home price reached a record high of $389,800 in 2023.
• First-time homebuyer share dipped to 29%, while inventory grew 4.2% from last year, now sitting at a 3.2-month supply. This remains below a balanced market, highlighting the need for more construction.
• The West saw a surprising 7.8% sales increase in December, while other regions faced declines. However, all regions experienced year-over-year slumps.
• The Pending Home Sales Index, a leading indicator, held steady in November, suggesting potential stability in the coming months.

While 2023 was a challenging year for the housing market, recent trends, particularly those in inventory and interest rates, offer hope for a more active spring season.

(Data source: NAR)