Last month the number of pre-owned homes on the market dropped to one hundred thousand, the lowest figure since March. Selling all properties on the marketplace would take 3.2 month at the current pace. Realtors consider anything less than five months’ supply to be indicative of a tight market.

The lack of stock is keeping prices high. The median selling prices in December increased from US$382,600 to US$382,600, reflecting an increase in all regions. Prices in 2023 reached a new record of US$389800.

Approximately 56% of the houses sold had been on the market less than a week. Property remained for 29 days on the market, compared to just 25 days in Novembre.

New projections indicate that it could take many years to recover the resale rate to pre-pandemic levels. This is due to the high cost of houses relative to incomes.

Majority of the purchases are made on existing-homes and they are based off contract closings. The data for new-home sales that reflect contract signings is due next week.

In December, the number of US homes sold by owners who already owned them fell to the lowest level in over three decades.

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The policymakers have now shifted to cutting mortgage rates. They are down from the peak of near 8% in October. Existing homeowners are still reluctant to sell and move their property until rates continue to fall.

The sales of the latest month look like the bottom, before the inevitable rise in the new calendar year. Mortgage rates are significantly lower than they were just two months earlier, and there is more inventory expected in the upcoming months.

The National Association of Realtors’ (NAR) latest data on Friday, January 19, shows that contract closings have decreased by 1% from a previous month to 3.78 million contracts annually. The sales for the entire year 2023 have fallen to their lowest levels since 1995.

The housing market, one of most sensitive sectors of the economy in terms of interest rates, was hit hard by the Federal Reserve’s decision to raise borrowing costs. This was the first time since the early 2000s that the Federal Reserve had raised these costs.

The pace of activity is increasing. This week, data showed that mortgage applications have reached their highest level in July. Homebuilder confidence has improved too, which should boost new construction.