Summary
Home sellers were more active in December than in December 2022, with the number of homes for sale increasing, ending a seven-month decline in listings. Home prices remained relatively stable. However, many home buyers appear to be delaying purchasing a new home due to current interest rates.
Report
Realtor.com data shows the US housing market had more unsold homes in December than in December 2022. Ongoing growth in new listings may help explain the higher unsold inventory. Since about two-thirds of existing mortgages have rates below 4%, many people may delay selling their homes in hopes of lower rates to buy their next home. Listing activity continues to improve on an annual basis.
In December, there was a 4.9% increase in homes for sale compared to 2022. This positive trend is a result of a slight decrease in active inventory in December 2023. The total number of homes for sale increased by 3.6% compared to December 2022, ending a 7-month decline in listings. The number of pending listings rose by 0.7% compared to last December, recovering from November’s decline.
It is the first annual increase in pending listings since August 2021. Sales, which had been declining for 5 months, are showing signs of improvement with the increase in pending homes. Home sellers were more active in December with 9.1% more newly listed homes compared to December 2022 following a 17-month decline. Listing activity has now increased for the second month in a row.
Furthermore, home buyers typically avoid making big moves during the December holiday season unless it’s absolutely necessary for them to buy or sell. Home selling is less diverse during these months due to different buying and selling patterns than in the peak summer season. While the annual growth in newly listed homes is promising, it is still too soon to declare it a trend reversal.
Homes spent less time on Market than in December 2022. The average home took 61 days to sell in December, four days less than in December 2022, and 16 days shorter than the average from 2017 to 2019. Home listing prices remain relatively stable compared to December 2022. The national median list price dropped seasonally to $410,000 but remained relatively stable with a 1.2% growth compared to December 2022.
Limited inventory has driven up listing prices while new home sales and construction activity haven’t fully addressed the low inventory issue. The percentage of homes with price reductions dropped from 14.1% in December 2022 to 12.7% in December 2023. More price reductions could signal a softening in listing prices, but the median list price has stayed stable for several months compared to 2022.
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