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Last month I wrote that existing home sales “are likely in the process of bottoming, as they have been in the range of 3.79 million to 4.10 million for the past five months:”

That continued to be the case in December, as sales declined -3,000 on an annualized basis to 3.78 million:

On a longer-term basis, existing home sales are at the lowest level in almost 30 years, and down over -40% from their post-pandemic peak:

With so many people locked into mortgages of 3% or so, inventory continues to be anemic, so potential buyers are bidding on the relatively few homes available. This is keeping prices close to their highs. Prices have been higher YoY for the past six months, currently up 4.4%:

This is in contrast to new homes, where builders can control sizes, amenities, rebates, and prices to generate demand. In that market prices are down about 10% YoY and sales are down about 25% from just before the Fed started raising rates. So the bifurcation of the two markets continues.

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