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Existing home sales see 11th straight month of decline
Existing home sales declined 1.5 percent in December to a seasonally-adjusted annualized rate of 4 million units, marking the 11th straight month of declining sales and a 34 percent decrease in sales compared to last year. NAFCU Chief Economist and Vice President of Research Curt Long analyzes the data in the latest Macro Data Flash report.
“Lack of available homes in combination with declining but still relatively high mortgage rates continues to sideline potential buyers,” said Long.
Based on current sales, there were 2.9 months of supply at the end of December. Analysts consider 6 months of inventory a rough balance between supply and demand.
“While the median price is up on a year-over-year basis, the Case Shiller index has declined for four consecutive months through the latest reading in October,” added Long. “According to the National Association of Realtors, properties typically remained on the market 26 days in December, 2 days longer than in November.”
Sales fell slightly across most regions in December. Sales in the South fell 2.2 percent, followed by the Northeast (-1.9 percent), and the Midwest (-1 percent). Sales in the West remained flat.
“Last month was a difficult sales environment for other reasons too, including a harsh dose of cold weather that swept down the East Coast and across much of the Midwest, and the fact that two holidays fell squarely on prime sales days,” concluded Long. “If the labor market can remain buoyant, home sales should begin to trend modestly upward in early 2023.”
For more economic updates from NAFCU's award-winning research team, view all of NAFCU's Macro Data Flash reports.