Deep freeze hits housing market in December with strongest seasonal slowdown in 2 years

As temperatures dropped during the holiday season, so did the level of activity in the residential real estate market, which suffered its strongest seasonal slowdown in nearly two years.

“Homes spent 70 days on the market, the slowest December in five years and the slowest month since January 2023,” says Realtor.com® Senior Economist Ralph McLaughlin in his December housing report.

The average home stayed on the market nine days longer than in December 2023. In November, homes spent an average of 62 days on the market. Inventory also fell 8.6% from November — the biggest drop since January 2023.

The icy pace of home sales came down to higher mortgage rates, which rose to 6.85% for the week ending in December. 26, according to Freddie Mac. This has kept potential buyers on the sidelines as they bide their time during the fall and early winter months. That’s despite the median listing price dropping about $15,000 since last year, to $402,502.

“We find that high mortgage rates continue to lead to a sluggish market, with December 2024 being the slowest December since 2019 and the slowest month in nearly two years,” says McLaughlin.

Like home buyers, sellers took a breather last month, with just 0.9% more new homes listed on the market compared to last year, and down 2% from November.


The residential real estate market saw its biggest slowdown in two years in December. Christopher Sadowski

On the plus side, the number of homes under contract but not yet sold continued to rise in December, up 7.4% from a year earlier, but was still nearly half of November’s 14.7% gain.

“It’s typical for the housing market to slow down at the end of the year as buyers and sellers focus their attention on the holidays and push activity into the new year when the market and weather are warmer,” he says. Hannah Jones, Senior Economic Research Analyst at Realtor.com.

But Jones points out that the market slowed more than is typical between November and December, in part because of high mortgage rates that have hovered in the high 6% range since late October.

However, some relief is expected in the new year in the form of slightly lower rates. The Realtor.com 2025 Housing Forecast predicts that mortgage rates will average 6.3% throughout 2025 and end the year at 6.2%.

Economists at Realtor.com predict that the slightly lower rates and time will go away from the “lock-in” effect — the reluctance of homeowners to list their properties because of their current low mortgage rates.

Overall, home sales are expected to rise 1.5% in the new year.

House prices continue to fall

The median home price last month was down 1.8% year over year to $402,502. However, this final number does not tell the whole story.

“When accounting for a shift in inventory mix toward smaller homes, the typical home listed this year has increased in asking price compared to last year,” McLaughlin notes in the monthly report. “The average listing price per square foot increased 1.3% in December compared to the same time last year.”

Basically, while the average listing price for a home may have dropped, that’s only because cheaper properties that boast a more modest square footage are hitting the market. It is a continuation of a trend seen earlier in November.


The average home was on the market last month for nine more days than in December 2023.
The average home was on the market last month for nine more days than in December 2023. Christopher Sadowski

While the decline in list prices remained steady year-over-year at about 13%, the data shows that home sellers were more likely to play hard on price compared to November, when 16.7% of listing prices fell .

Housing inventory is kept stable

The number of active listings on the market increased in December, with 22% more homes for sale compared to the same time a year ago, making it the 14th consecutive month that inventory increased.

But McLaughlin points out that this is a dramatic slowdown from November, when active listings rose 26.2% year over year. The huge 8.6% drop from November to December was the biggest month-on-month drop since January 2023.

“While inventory this December certainly continues to improve, it is still down 15.7% from typical 2017-2019 levels,” adds McLaughlin.

When it comes to housing stock nationwide, the South continued to dominate the market, with a 26.7% increase in active listings compared to December 2023, although the average listing price saw a 2.3% year-over-year decline.

The West saw a 23.7% increase in home inventory last month, accompanied by a 1.3% drop in the median listing price compared to the same time last year.

The Midwest and Northeast continued to play with their housing stock levels, with active listing counts at 15.2% and 6.9%, respectively, and listing prices remained nearly unchanged year-over-year.

Meanwhile, new listings were all over the map in December, with the South seeing the biggest gain, up 4.8%, followed by the West, up 2%. Both the Northeast and Midwest, however, suffered losses, falling 5.6% and 6.6% respectively in new listings.

Compared to the typical December from 2017 to 2019, before the COVID-19 pandemic, the South completely closed the gap in housing stock, while the gap was 4% in the West, and much larger in the Midwest and Northeast, at 36.5% and respectively 48.7%.

Prospective homebuyers looking for the largest selection of properties for sale in major metros should turn their attention to Miami, where inventory grew in December by an impressive 45.4%, followed by Orlando, FL, by 42.4%, and Denver, by slightly less than 42%.

Meanwhile, Atlanta was ahead when it came to newer listings (+17.8%), with Birmingham, AL, hot on its heels (+17.1%).

In total, there were about 871,600 active and unsold listings on the market in December, along with about 350,000 listings under contract.

December’s slow market can be both a blessing and a curse for buyers considering buying a home during the slow winter months. On the one hand, the lack of new listings means fewer options for buyers, but it also means they have more time to make a decision and less competition.

“It’s challenging to perfectly define the housing market,” says Jones. “Winter can be a great time to buy for some buyers looking for more seller flexibility and can find a suitable home on the market.

“However, spring may be better for buyers who can’t find what they’re looking for on the market right now and are willing to pay a little more for their ‘perfect’ home.”

#Deep #freeze #hits #housing #market #December #strongest #seasonal #slowdown #years
Image Source : nypost.com

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top