Existing home sales in the US were the lowest in nearly 30 years in 2023.

That’s what happens when prices are perched at nosebleed levels, resale inventory is nonexistent and mortgage rates are the highest in decades.

The NAR on Friday said sales were 4.09 million on an annual basis, with median prices near $390,000, some 240% higher than the median price in 1995, when sales were last this low.

For December, existing home sales fell 1% against expectations for a small gain.

Last month’s decline was the 20th in 23 months, which is to say existing home sales have managed just three monthly increases since the Fed started hiking rates.

One might’ve expected sales to rise in December given the sharp drop in financing costs but… alas. I’ll go out on a limb to suggest that 6.6% on the 30-year fixed isn’t low enough to mitigate the golden handcuffs effect.

Note that although Redfin’s data showed pending home sales rose 4% in December, the most in more than two years, the response from sellers to lower rates was more muted.

“Homebuyers came out of the woodwork as mortgage rates posted the biggest monthly decline since 2008,” Lily Katz wrote Friday, adding that “the dip in mortgage rates also brought sellers off the sidelines [but] they haven’t returned with as much intensity as buyers, likely because a majority of them don’t want to give up the ultra low mortgage rate they scored during the pandemic.”

Inventory at the end of last month was 1 million units, according to the NAR, down double-digits from November. Months’ supply was 3.2, meaningfully lower MoM, but at least better than December 2022.

The dearth of  inventory continued to bolster prices. On a YoY basis, the median rose 4.4% to $382,600.

December’s 12-month price gain was the six consecutive.

That’s good news for homeowners. “85 million homeowning households enjoyed further gains in housing wealth,” NAR Chief Economist Lawrence Yun said Friday. “Obviously, the recent, rapid three-year rise in home prices is unsustainable,” he added. (Yes, “obviously.”)

Yun went on to describe a rebound in sales as “inevitable” given lower mortgage rates. Notwithstanding Redfin’s upbeat read on pending transactions, I’ll gently note that nothing’s inevitable. Or nothing good, anyway.