New data indicates just how bad sales volume slumped in the real estate market.
The rollercoaster ride in the housing market continued in December, with sales taking a dip for the month but still holding above the 2010 lows. December’s 1% decline brought the annualized pace to 3.78 million units, marking a 6.2% drop from last year and the weakest showing since 1995. Meanwhile, some experts predict it could be the bottom before we see a climb throughout 2024, fueled in part by falling mortgage rates and an expected rise in available homes according to the NAHB.
Regionally, the picture was mixed. The Northeast held steady, the Midwest and South saw mild dips, while the West defied the trend with a 7.8% jump. These mixed results, can be traced back to October and November’s sky-high mortgage rates, which cast a long shadow on December’s closings.
Speaking of prices, they remained hot despite the sales slowdown. The median price hit $382,600 in December, a 4.4% increase from last year and the sixth consecutive month of gains. Home values in 2023 closed out with record breaking median price of $389,800. Tight supply kept the home prices steady, while homes lingered a bit longer on the market, averaging 29 days compared to 25 in November.
But there’s some good news for weary buyers. Investors, who typically snap up a chunk of homes with cash, pulled back a bit in December. This could mean less competition for first-time buyers in the coming year, especially since rents are starting to cool and more rental options are popping up.
So, while December wasn’t exactly the turnaround story, it might be the prelude to an improved 2024. Falling rates, more recently hitting the lowest level since may of 2023 along with more inventory, and potentially less investor pressure could pave the way for increased first-timer buyers activity, even if it’s not at the rock-bottom price they might have hoped for.
