Sales of previously owned homes — which account for more than 90 percent of total home sales and are a key indicator of overall economic strength — were down 17.8 in 2022 from 2021, pushed down by rising mortgage rates that made home ownership unaffordable for many buyers.

However, declining mortgage rates raised hopes that the housing market could be close to bottoming out.

After falling for 11 straight months, existing home sales in December 2022 were 34 percent lower year-over-year than in December 2021, the National Association of Realtors said on Friday, Jan. 20. That’s the slowest pace since November 2010, when the U.S. was struggling through the sub-prime mortgage crisis and Great Recession.

“December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said National Association of Realtors Chief Economist Lawrence Yun in a press release. “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”

Existing home sales make up most of the housing market. They measure the number and price of sales of single-family homes other than new constructions. They are considered a U.S. economic indicator of the availability and affordability of mortgages and real estate and also a lagging indicator that tends to react after changes in mortgage interest rates. Existing home sales tend to fall after mortgage rates rise and vice versa.

Total housing inventory registered at the end of December was down 13.4 percent from November but up 10.2 percent from a year ago. At the current sales pace, unsold inventory is at a 2.9-month supply, down from 3.3 months in November but up from 1.7 months in December 2021.

Home prices are still increasing year over year.

The median existing-home price for all housing types in December was $366,900, up 2.3 percent from December 2021 ($358,800), with prices rising in all regions. That’s 130 consecutive months of year-over-year increases, the longest on record.

“Home prices nationwide are still positive, though mildly,” Yun said. “Markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year.”

All-cash sales accounted for 28 percent of sales in December, up from 23 percent in December 2021 and 26 percent in November, according to NAR.

Cash buyers increased during the pandemic thanks to record-breaking home equity. Investors have also been a growing share of cash sales in some markets.

Investors are more likely than traditional buyers to buy properties with cash, according to real estate website HomeLight.com.

“Cash buyers are unaffected by fluctuations in mortgage rates and were able to take advantage of lower prices in some areas,” Yun said.

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.15 percent as of January 19. That’s up from 3.56 percent a year ago but down from 6.33 percent last week.

Here’s a regional breakdown of median home prices by region in December for existing home sales, according to the NAR:

Midwest: $262,000, an increase of 2.9 percent from December 2021.

South: $337,900, an increase of 3.5 percent from December 2021.

Northeast: $391,400, an increase of 1.6 percent from December 2021

West: $557,900, an increase of less than a tenth of a percent from December 2021.