Existing home sales fell to a 28-year low in 2023, while the median home price hit a record high, according to a new report from the National Association of Realtors (NAR).
Existing home sales fell to 4.09 million units last year, the lowest annual home sales since 1995, according to the report. Meanwhile, the median price of existing homes rose to a record high of $389,800.
Home sales fell 1% last month alone and 6.2% compared to December 2022, to a seasonally adjusted annual rate of 3.78 million units, while the median home price increased 4.4% year over year to 380,000 units. It came to $2,600.
Lawrence Yun, NAR's chief economist, warned in a statement Friday that the recent rapid rise in home prices is “unsustainable.”
“If prices continue to rise at their current pace, this country could accelerate towards haves and have-nots,” he said. “Creating a path to homeownership for today's renters is essential. It requires economic and income growth and, most importantly, a steady increase in home construction.”
But Yun also said that with lower mortgage rates and inventory expected to rise in the coming months, home sales in December “look like they'll be at the bottom until the inevitable uptick in the new year.” He also suggested.
Rates on 30-year fixed mortgages averaged 6.6% this week, down from a peak of nearly 8% in late October, according to Freddie Mac.
Mortgage rates have risen over the past two years as the Federal Reserve repeatedly raised interest rates to curb high levels of inflation. However, the central bank appears to be nearing the end of its rate hike campaign, having kept rates unchanged for the past three consecutive meetings.
A majority of Fed officials also predicted in December that the central bank would cut rates at least twice in 2024, with the largest group expecting three cuts this year.
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