Home sales in 2023 hit lowest in 28 years as affordability crisis hits Americans

Sales of existing homes, which make up the majority of the housing market, fell to their lowest level since 1995 as rising prices and rising mortgage rates increased unaffordability, according to the National Association of Realtors (NAR).

Existing home sales plunged 1.0% in December compared to the previous month, down 6.2% annually, with 4.09 million homes sold for the year. seconds to a report from the NAR. Falling sales carry on a year of rising prices due to inflation, limited supply and sky-high mortgage rates, which at one point approached 8%, suppressing the demand and purchasing power of Americans in the housing market housing

“Despite sluggish home sales, 85 million households enjoyed more gains in housing wealth,” Lawrence Yun, NAR's chief economist, said in the statement. “Obviously, the recent three-year rapid rise in home prices is unsustainable. If price increases continue at their current pace, the country could accelerate the poor and have-nots. Create a pathway to home ownership of housing for today's renters is essential. It requires economic and income growth and, most importantly, a steady increase in homebuilding.”

The median existing home price rose 4.4% year-on-year in December to $382,600 after rising for six straight months, having previously hit a record median price of $389,000 in early 2023, according to the NAR. The number of existing homes not for sale rose 11.5% from November to December, totaling 1 million, but up 4.2% from a year ago.

Mortgage rates hit a recent high on October 26, 2023, at 7.79% after rising rapidly from just 2.65% at the start of 2021. seconds at the Federal Reserve Bank of St. Louis. Mortgage interest rates have clashed up pressure from Federal Reserve hikes in the federal funds rate, which is currently in a range of 5.25% to 5.50%, the highest in 22 years.

The price of the house has consistently outpaced inflation under President Joe Biden, rising 18.6% since the president took office in January 2021, compared to an overall economy-wide price increase of 17.6%. Home prices rose 6.2% year-on-year in December, well above the current annual rate of 3.4%.

Latest messages from Will Kessler (see everything)

We have zero tolerance for comments that contain violence, racism, profanity, profanity, doxing, or rude behavior. If a comment is spam, instead of replying to it, click the ∨ icon below and to the right of that comment. Thank you for engaging with us in a fruitful conversation.