According to the National Association of Realtors, existing home sales declined for the 11th consecutive month in December, their lowest level since November 2010. It is expected, however, that in 2023, a more balanced housing market will emerge. Experts seem to be more optimistic about this scenario.
In December, NAR reported that total existing-home sales fell 1.5% from November to 4.02 million on a seasonally adjusted annual basis. The number of sales dropped 34% from 6.09 million in December 2021.
Yun explained that buyers faced limited inventory and high mortgage rates in December, which made it difficult for them to buy homes.
NerdWallet’s Holden Lewis explained that the real estate market in 2022 will be far different than it was 12 years ago, despite the new record low. Several buyers couldn’t afford homes due to high mortgage rates, he said, resulting in a slow December sales market. 2010 was the year when the market was emerging from the Great Recession. In spite of a modest decline in home prices each month since June, a housing crash seems unlikely since there aren’t many houses for sale, and demand from buyers hasn’t fallen.
In December 2021, the median existing-home price was $358,800; in December 2022, it was $366,900, up 2.3%. The 130 consecutive monthly increases are the longest ever recorded.
It is still a positive market for home prices nationwide, though only mildly, Yun said. A substantial portion of the country’s housing market is expected to offer potential buyers discounted prices.
A total of 970,000 units were registered as of the end of December, a decrease of 13.4% compared to November but an increase of 10.2% over a year ago (880,000 units). At the current sales pace, unsold inventory sits at 2.9 months, down from 3.3 months in November, but up from 1.7 months in December 2021.
With prices easing and mortgage rates continually declining, Yun expects sales to pick up soon.
As of January 19, the benchmark 30-year fixed-rate mortgage averaged 6.15%, according to Freddie Mac. In comparison to last week, that’s down from 6.33%, but up from 3.56% a year ago.