2023 slowest year for US home sales in 30 years

LOS ANGELES

Sales of previously occupied U.S. homes sank in 2023 to a nearly 30-year low, as sharply higher mortgage rates, rising prices and a persistently low level of homes on the market combined to push homeownership out of reach for many Americans.

The National Association of Realtors said that existing U.S. home sales totaled 4.09 million last year, an 18.7 percent decline from 2022. That is the weakest year for home sales since 1995 and the biggest annual decline since 2007, the start of the housing slump of the late 2000s.

The median national home price for all of last year edged up just under 1 percent to record high $389,800, the NAR said.

Last year’s home sales slump echoes the nearly 18 percent annual decline in 2022, when mortgage rates began rising, eventually more than doubling by the end of the year. That trend continued in 2023, driving the average rate on a 30-year mortgage by late October to 7.79 percent, the highest level since late 2000.

The sharply higher home loan borrowing costs limited home hunters’ buying power on top of years of soaring prices. A dearth of homes for sale also kept many would-be homebuyers and sellers on the sidelines.

Still, a pullback in mortgage rates since late last year, and forecasts calling for a further rate declines this year, is fueling hopes that home sales will begin to bounce back from their dismal showing in 2023.

Mortgage rates have been mostly easing since November, echoing a pullback in the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield has largely come down on hopes that inflation has cooled enough for the Federal Reserve to shift to cutting interest rates this year.