According to data from the National Association of Realtors (NAR), the sales volume of existing homes decreased by 1% in December, with an annual sales volume of 3.78 million units, a figure adjusted for seasonal variations. Compared to the same period last year, existing home sales declined by 6.2%.
The decline in sales volume is mainly attributed to a shortage of supply. The persistent demand surpassing the available supply of homes for sale has led to the lowest level of home sales in over a decade. This supply-demand imbalance has also driven an increase in home prices, becoming a prominent feature of the real estate market throughout the year.
Statistical data indicates that, compared to the previous year, the median price of existing homes in December increased by 4.4% to $382,600. Despite this rise, prices are still lower than the peak in June 2022 when the median resale home price reached $413,800.
NAR points out that, overall, the home sales volume in 2023 decreased by nearly 19% compared to the previous year, reaching the lowest level since 1995. The rise in home prices corresponds to the decrease in sales volume, with the median home price reaching a record high of $389,800. This contrasts sharply with the situation in 1995 when the median home price was only $114,600.
Further analysis of the data reveals that the total number of homes for sale in December increased by 4.2% compared to the previous year, reaching 1 million units. However, the average time homes listed for sale stayed on the market increased to 29 days, indicating that despite an increase in supply, homes are still not abundant enough, and there is fierce competition among buyers for quality properties.
The overall situation in the US real estate market varies. The Western region experienced the highest sales growth, reaching 7.8%, with a median home price of $582,000. Nationwide, cash buyers accounted for 29% of sales, individual investors or second-hand home buyers accounted for 16%, and approximately 29% of homes were sold to first-time buyers.
Faced with this situation, Lawrence Yun, Chief Economist of the National Association of Realtors, expressed optimism that sales volume is expected to gradually increase in the new year. He pointed out that the sales volume in the last month seems to be at a low point, and the significant decrease in mortgage interest rates in the coming months may attract more homebuyers back into the market, potentially increasing inventory.
The market's reaction to this news is also worth noting. The Dow Jones Industrial Average rose in early Friday trading, indicating investors' optimism about the recovery of the real estate market. At the same time, the yield on the 10-year Treasury exceeded 4.15%, indicating an increasing confidence in economic recovery in the market.
