Existing home sales rose 2.2% in December, marking strong end to challenging year

Existing home sales increased 2.2% in December to a seasonally adjusted annual rate of 4.24 million units, the National Association of Realtors reported Wednesday. The December sales pace marked the strongest showing since February 2024 and represented a 9.3% increase from the previous year.

Despite the year-end surge, 2024's total existing home sales fell to 4.06 million units, the lowest annual level since 1995. The median home price reached a record high of $407,500 for the year.

"Home sales in the final months of the year showed solid recovery despite elevated mortgage rates," said NAR Chief Economist Lawrence Yun. "Home sales during the winter are typically softer than the spring and summer, but momentum is rising with sales climbing year-over-year for three straight months."

The median existing home price in December was $404,400, up 6.0% from December 2023. The price increase reflected stronger activity in luxury markets, with sales of homes priced above $1 million jumping 35% year-over-year while sales declined for properties under $250,000.

Housing inventory tightened considerably, dropping 13.5% from November to 1.15 million units, though remaining 16.2% higher than December 2023. At the current sales pace, this represents a 3.3-month supply.

First-time buyers comprised 31% of December purchases, showing a slight increase from November's 30%. Cash transactions accounted for 28% of sales, up from 25% in November but down from 29% the previous year.

The 30-year fixed mortgage rate averaged 6.96% as of January 23, according to Freddie Mac, down from 7.04% the previous week but higher than the 6.69% rate recorded one year ago.

Single-family home sales increased 1.9% to a seasonally adjusted annual rate of 3.83 million, while condominium and co-op sales rose 5.1% to 410,000 units.