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Existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops—decreased 1% from November to a seasonally adjusted annual rate of 3.78 million in December, according to the National Association of Realtors (NAR).

On a year-over-year basis, December sales were 6.2% lower. The median existing-home sales price also rose for the sixth consecutive month to $382,600.

On an annual basis, existing-home sales in 2023 (4.09 million) fell to their lowest level since 1995, while the median price reached a record high of $389,800.

“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” says NAR chief economist Lawrence Yun. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.”

Total housing inventory registered at the end of December was 1 million units, down 11.5% from November but up 4.2% on a year-over-year basis. Unsold inventory sits at a 3.2-month supply at the current sales pace, higher than 2.9 months in December 2022.

“Despite sluggish home sales, 85 million home-owning households enjoyed further gains in housing wealth,” Yun says. “Obviously, the rapid three-year rise in home prices is unsustainable. If price increases continue at the current pace, the country could accelerate into haves and have-nots. Creating a path toward homeownership for today’s renters is essential. It requires economic and income growth and, most importantly, a steady buildup of home construction.”

According to the REALTORS Confidence Index, properties remained on the market for 29 days in December, up from 25 days in November and 26 days in December 2022. First-time buyers accounted for 29% of sales in December, down from 31% in November 2023 and December 2022.

All-cash sales accounted for 29% of transactions in December, but the share of individual investors or second-home buyers—who make up many cash sales—declined to 16% from 18% in the prior month.

Single-family home sales declined to a seasonally adjusted annual rate of 3.4 million in December, down 0.3% on a month-over-month basis and 6.1% on a year-over-year basis. The median existing single-family home price increased 4% year over year to $387,000 in December.

Existing-home sales were unchanged in the Northeast on a month-over-month basis but declined 9.6% compared with December 2022. In the Midwest, sales fell 4.3% compared with November levels and 10.9% compared with December 2022.

Existing-home sales in the South fell 2.8% month over month and 4.4% year over year in December 2023. In the West, existing-home sales increased by 7.8% compared with November but were down 1.4% from the prior-year period in December.