Housing market sales are the lowest since 1995—what is different in 2023

Data revealed last week by the National Association of Realtors shows that existing home sales in December 2023 dropped to their lowest levels since 1995. The month had just 4.09 million transactions, even worse than figures from any month during the entire Global Financial Crisis, which was famously caused by a housing bust that put millions of people underwater on their mortgages. 

NAR expanded on the data with an economist report released Monday illustrating how today’s housing market compares to that of 1995, when there were 3.85 million existing home sales. The caveat, NAR says, is that the “world was much different” in the ‘90s, the last time home sales were this low. 

Housing market differences from the 1990s

The first major difference between these two housing markets is the total U.S. population. In 1995, the population was a bit more than 266 million, but today more than 336 million people live in the U.S., meaning that another 70 million people can barely match a housing activity level from nearly three decades ago, putting in perspective the historical drop in activity. What’s going on, to make things this bad?

“That answer becomes clear when looking at both inventory and affordability,” Jessica Lautz, deputy chief economist and vice president of research at NAR, wrote in this week’s report.

In terms of inventory, there were 1.58 million single-family homes up for sale in December 1995, compared to just 870,000 last December. Supply was 4.8 months in 1995 compared to only 3.1 months in 2023, she adds.

“2023 was actually worse than 1995 when accounting for population growth,” Mark Fleming, chief economist at Fortune 500 financial services…