NAR: Existing-Home Sales Decreased to 3.78 million SAAR in December; Months-of-Supply above December 2019

Lowest Annual Sales Since 1995

From the NAR: Existing-Home Sales Slid 1.0% in December

Existing-home sales retreated in December, according to the National Association of REALTORS®. Among the four major U.S. regions, sales slipped in the Midwest and South, rose in the West and were unchanged in the Northeast. All four regions experienced year-over-year sales decreases.

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

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – decreased 1.0% from November to a seasonally adjusted annual rate of 3.78 million in December. Year-over-year, sales declined 6.2% (down from 4.03 million in December 2022).
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Total housing inventory registered at the end of December was 1 million units, down 11.5% from November but up 4.2% from one year ago (960,000). Unsold inventory sits at a 3.2-month supply at the current sales pace, down from 3.5 months in November but up from 2.9 months in December 2022.
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The sales rate was below the consensus forecast.

Sales in December (3.78 million SAAR) were down 1.0% from the previous month and were 6.2% below the December 2022 sales rate. This is a new cycle low.

Housing Inventory Decreased Seasonally in December

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory decreased to 1.00 million in December from 1.13 million the previous month.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The third graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was up 4.2% year-over-year (blue) in December compared to December 2022. Months-of-supply (red) decreased to 3.2 months in December from 3.5 months the previous month.

In December 2019, months-of-supply was at 3.0 months, so there is actually more supply now, on a months-of-supply basis, than prior to the pandemic. This is due to a sharp decline in both sales and inventory.

Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2022 and 2023.

Sales declined 6.2% year-over-year compared to December 2022. This was the twenty-eighth consecutive month with sales down year-over-year. This was just below the previous cycle low of 3.79 million SAAR in October.

On an annual basis, sales were down 19% from 2022 to the lowest level since 1995.