According to the National Association of Realtors, sales of previously owned U.S. homes will fall for a second year in 2023 to their lowest annual total since 2012 when the housing market was still in a slow recovery from the sub-prime mortgage crisis, but sales prices should hold up.
Existing-home sales, which have fallen each month since January, as mortgage rates surged on the back of the Federal Reserve’s aggressive campaign to hike interest rates to control inflation, are projected to slide by another 6.8% to 4.78 million in 2023.
Sales through October were just shy of 4.4 million, and experts predict the 2022 total will reach 5.13 million units, when November and December data are reported down by more than 16% from 2021’s 6.12 million. That year was the highest sales total since 2006, just ahead of the financial crisis.
Prices will continue to be supported by supply constraints and should remain more or less flat, with the median transaction price estimated at $385,800 versus $384,500 this year. There were 1.22 million existing homes for sale in October, roughly half of the average monthly inventory of 2.3 million units since 1982.
A second straight weaker-than-expected reading of U.S. consumer inflation in November, reported earlier on Tuesday, is expected to offer the Fed cover to slow its rate hike pace to 50 basis points at its policy meeting this week after four straight 75-basis-point increases.