With the exception of the period immediately after the beginning of the COVID-19 epidemic, existing home sales declined for the eleventh consecutive month in December, falling to their lowest annualised pace since 2010.
In a statement on Friday, the National Association of Realtors (NAR) said that existing home sales fell by 1.5 percent from November and by 34% from a year ago, to a seasonally adjusted annual rate of 4.02 million last month.
According to NAR, there were 5.03 million existing home sales in 2022, a 17.8 percent decrease from 2021.
Lawrence Yun, the chief economist for NAR, stated that “December was yet another challenging month for purchasers, who continue to face low inventory and high mortgage rates.” However, given that mortgage rates have significantly dropped since peaking late last year, expect sales to go up again soon.
In an effort to curb inflation, the Federal Reserve has aggressively increased interest rates during the past year, raising the cost of borrowing money for other purposes as well as the cost of mortgages.
The Fed’s actions appear to be having an effect as wholesale prices decreased by 0.5 percent last month, which was more than the predicted 0.1 percent decline. However, the agency’s target level for inflation is 2 percent, and it was 6.2 percent in December.
According to NAR, the median existing house price across all property types was $366,900 in December. This represents a 2.3 percent increase from the median existing home price of $358,800 in December 2021. Prices have increased year over year for 130 straight months, which is the longest stretch ever noted.
970,000 units were in inventory at the end of December, up 10.2 percent from a year earlier but down 13.4 percent from November. 31% of sales were made by first-time purchasers.
From 26% in November and 23% in December before, all-cash sales increased to account for 28% of purchases in December.