Existing home sales drop for 11th straight month

Sales of existing homes dropped for the 11th straight month in December, dropping to its lowest annualized pace since 2010 except for immediately following the start of the COVID-19 pandemic. 

The National Association of Realtors (NAR) said in a release on Friday that existing home sales last month stood at a seasonally adjusted annual rate of 4.02 million, a drop of 1.5 percent from November and 34 percent from a year prior. 

NAR reported that existing home sales were at 5.03 million during 2022, which is a 17.8 percent drop from 2021. 

“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” NAR Chief Economist Lawrence Yun said. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.” 

The Federal Reserve has aggressively raised interest rates throughout the past year to get inflation under control, making mortgages and the cost of borrowing money for other purchases more expensive. 

The Fed’s moves appear to be showing signs of working, as wholesale prices fell by 0.5 percent last month, surpassing the expected 0.1 percent drop. But inflation was at 6.2 percent in December, and the agency has set 2 percent as the target level. 

NAR reported that the median existing home price for all housing types last month was $366,900, which was a 2.3 percent increase from the $358,800 recorded in December 2021. Year-over-year prices have risen for 130 consecutive months, the longest-running streak ever recorded. 

Inventory at the end of December was 970,000 units, down 13.4 percent from November but up 10.2 percent compared to a year ago. First-time buyers made up 31 percent of sales. 

All-cash sales rose to 28 percent of purchases in December, a rise from 26 percent in November and 23 percent the previous December.