Existing Home Sales Fell Less Than Expected in December

Sales of previously owned homes fell for the 11th consecutive month in December, less than expected, as mortgage rates eased and price increases slowed.

Existing home sales dropped 1.5% to 4.02 million, well below economists’ estimates of a 4.5% slide and November’s 7.9% dip, the National Association of Realtors (NAR) reported Friday. They were down 34% from a year earlier.

Sales may pick up soon as interest rates slow their advance after peaking last year, even as potential buyers confront limited inventory, according to Lawrence Yun, the NAR's chief economist.

Yun pointed out that more buyers are avoiding paying high rates by making all-cash purchases, which accounted for 28% of all transactions last month, up from 26% in November and 23% in December of 2021. 

Price Discounts

Yun explained that prices “are still positive, though mildly,” with the median existing home price higher by 2.3% to $366,900. He added that markets in about half the country are likely to offer discounted prices compared to last year.

Total housing inventory in December was 970,000 units, 13.4% lower than the month before but an increase of 10.2% from a year earlier. Unsold inventory is at a 2.9-month supply at the current sales pace.