2023 home sales fell to lowest level in nearly 30 years, new report reveals

Real estate outlook: Buying a home in 2024

Is 2024 a good time to buy a house? New York City real estate expert and agent Frances Katzen explains.

WASHINGTON - A new report reveals that existing-home sales in 2023 dropped to their lowest level since 1995, while the median price reached a record high.

The National Association of Realtors said Friday that existing U.S. home sales totaled 4.09 million last year, an 18.7% decline from 2022.

In December, the association said sales slipped in the Midwest and South, rose in the West and were unchanged in the Northeast. However, 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.

For sale sign by owner sign hangs in front of a house in Mastic, New York, on January 14, 2018. (Credit: Steve Pfost/Newsday RM via Getty Images)

"The latest month's sales look to be the bottom before inevitably turning higher in the new year," said 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."

At the end of December, total housing inventory was down 11.5% from November but up 4.2% from one year prior.

The median existing-home price for all housing types in December was $382,600, an increase of 4.4% from December 2022.

"Despite sluggish home sales, 85 million homeowning households enjoyed further gains in housing wealth," Yun added. "Obviously, the recent, 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 towards homeownership for today's renters is essential. It requires economic and income growth and, most importantly, a steady buildup of home construction."

Mortgage rates drop following Fed Reserve meeting

Mortgage rates have fallen below 7% for the first time in months. This comes one day after the Fed Reserve announced rates would stay unchanged for a third consecutive meeting and signaled three rate cuts in 2024.

According to data, mortgage rates have been mostly dropping to more manageable levels for homebuyers since November.

"Christmas really did come early this year," Frances Katzen, the founder of The Katzen Team at Douglas Elliman, told FOX Television Stations earlier this month. "Because when the 10-year Treasury yield dipped below 4%, we immediately saw the 30-year fix reduce all the way down to 6.5 from 8, and now we're seeing 10-year interest only at 5.8 to 5.5."

The average 30-year fixed-rate mortgage was 6.6% this week, according to Freddie Mac's latest Primary Mortgage Market Survey.

If rates continue to ease, as many economists expect, that should help boost demand heading into the spring homebuying season, which traditionally begins in late February.

This story was reported from Los Angeles. The Associated Press contributed.