U.S. existing-home sales rose from a 13-year low, climbing 0.8% from the previous month and breaking a five-month streak in which sales declined, according to the National Association of REALTORS® (NAR). Despite the increase, sales were down 7.3% compared to the same period last year, as affordability challenges continue to hinder prospective buyers. Most of this period’s closed sales went under contract in October, when mortgage rates were at a two-decade high. With rates having dropped more than a full percentage point since then, existing-home sales may continue to pick up in the months ahead.
New Listings were down 37.5 percent for single family homes and 3.8 percent for Condo/TIC/Coop properties. Pending Sales decreased 14.7 percent for single family homes but increased 29.5 percent for Condo/TIC/Coop properties.
The Median Sales Price was up 2.3 percent to $1,535,000 for single family homes but remained flat at $1,125,000 for Condo/TIC/Coop properties. Months Supply of Inventory remained flat for single family units but was up 27.3 percent for Condo/TIC/Coop units.
Low levels of inventory continue to impact U.S. home sales, offering few options for aspiring buyers to choose from. Going into December there were 1.13 million units for sale, down 1.7% from the previous month but up 0.9% from the same period last year, for a 3.5 months’ supply at the current sales pace. As a result, sales prices remain high nationwide, with NAR reporting the median existing-home price rose 4% annually to $387,600 as of last measure, the fifth consecutive month of year-over-year price gains. Homebuyer demand is picking up, and without a significant increase in supply, experts believe home prices will likely remain elevated for some time to come.
2023 Year End Market Report
2023 was a challenging year for the U.S. housing market: mortgage rates hit a 2-decade high, housing inventory remained at historic lows, and sales prices continued to climb nationwide, putting homeownership out of reach for many consumers. Housing affordability remained a top concern for homebuyers, and for good reason: mortgage payments are up significantly from 2022, with a number of homeowners now spending more than 30% of their income on their monthly payment. As a result, sales of previously owned homes remained sluggish throughout the year, while the shortage of existing-home inventory helped sales of new residential homes steadily increase from last year.
Higher mortgage rates aren’t just affecting buyers. Many current homeowners purchased or refinanced their homes in 2020 or 2021, when mortgage rates were several percentage points lower than today’s rates. And while those pandemic-era mortgages have been a blessing for many homeowners, they’ve also kept others from moving. Rather than give up their current mortgage rate for a higher rate and a more expensive monthly payment, some would-be sellers have chosen to put their moving plans on hold, further limiting the number of homes for sale and driving up home prices in the process.
Sales: Pending sales decreased 25.6 percent, finishing 2023 at 4,120. Sold listings were down 27.4 percent to end the year at 4,092.
Listings: Comparing 2023 to the prior year, the number of homes available for sale was down by 19,7 percent. There were 612 active listings at the end of 2023. New listings decreased by 24.6 percent to finish the year at 6,209.
Prices: Home prices were down compared to last year. The overall median sales price decreased 9.1 percent to $1,315,000 for the year. Single Family home prices were down 12.9 percent compared to last year, and Condo/TIC/Coop home prices were down 8.3 percent.
List Price Received: Sellers received, on average, 103.0 percent of their list price at sale, a year-over-year reduction of 4.8 percent.
With inflation showing signs of improvement, the Federal Reserve recently announced they are likely done raising interest rates for the time being and plan to make at least three cuts to their benchmark rate in 2024. Mortgage rates have been dropping in recent months, which should help bring buyers and sellers back to the market and could lead to an uptick in both home sales and housing supply. Affordability will still prove challenging for many homebuyers, however, and economists predict U.S. home sales will remain down compared to 2019 – 2022. As for home prices, opinions are mixed, with some analysts expecting prices will hold steady or
Current as of January 11, 2024. All data from the San Francisco Association of REALTORS® MLS. Report InfoSparks © 2024 ShowingTime. All Rights Reserved. Coldwell Banker and the Coldwell Banker logos are trademarks of Coldwell Banker Real Estate LLC.
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