(The Center Square) – Kentucky’s housing market stalled a bit in December, according to data released by Kentucky Realtors.
As most consumers spent money on holiday shopping and some traveled for Christmas and the New Year, December brought with it a noticeable drop in new listings on the Kentucky housing market. The 2,973 homes that went up for sale during the month represented a 3.5% decline from December 2023 and a more than 40% drop from November’s listings.
Not only were there fewer homes on the market, but the Realtors’ report showed the properties remained on the market longer. The average time was 20 days last month, three days longer than in the prior year.
There were 3,270 properties sold in the state last month. That was .5% fewer than December 2023 and down 7.4% from November. While there were fewer closings, the median selling price for Kentucky, $265,000, rose by 8.8% compared to December 2023. It fell by less than 1% versus November’s median.
In all, the properties sold in December totaled $999.48 billion. That was also up 8.8% from December 2023, but it was off by 9.1% from November.
Kentucky Realtors President Barb Curtis said in a statement that the monthly report showed good and bad news.
“December’s housing market data demonstrates both the resilience and challenges of Kentucky’s real estate market,” Curtis said. “While we’ve seen impressive year-over-year growth in sales volume and median home prices, the drop in new listings highlights the continued need for inventory.”
The new year brings a few challenges to the housing market nationally. One of the biggest is the dwindling number of first-time buyers. Research from the National Association of Realtors released earlier this month found that only 24% of the homes bought in 2024 were acquired by first-time buyers. This figure has been decreasing steadily in recent years. In the 1980s, more than 40% of homes were sold to first-timers.
Not only are there fewer new buyers in the market, those that are first-time buyers are older than in previous years. The median age for a first-time buyer in 2024 was 38, the oldest age since NAR began tracking buyers’ ages in 1981. Back then, the median age was 29.
Another challenge for the housing market is rising interest rates. Jessica Lautz, NAR’s deputy chief economist, pointed out in a statement Thursday that the average 30-year fixed mortgage from Freddie Mac is now at 7.04% compared to 6.93% last week. While mortgage rates are at their highest since May, Lautz added that the past week has seen an uptick in mortgage applications.
However, she noted that the Consumer Price Index, which rose 2.9% across the board in December, could exacerbate the situation.
“The increase was from goods that Americans need, which could hold back savings for a down payment for first-time buyers who are more rate-dependent,” she said.