The National Association of Realtors said Friday that just over 4 million homes were sold in the U.S. in 2023. The last time sales fell below 4.1 million, another Democratic president was in the White House.

Barack Obama's administration would be a good guess. The 44th president inherited a financial crisis that led to the Great Recession and some of the lowest monthly home sales this century. And December's rivaled those. The seasonally adjusted annual rate fell to 3.78 million − 6.2% lower than in December 2022.

The answer: Bill Clinton. Like today, the Federal Reserve started rapidly increasing interest rates in 1994 to stem inflation. That drove 30-year mortgage rates over 9% and reversed what had been a growing housing market.

The silver lining: The Fed's actions then are considered a blueprint for a soft landing and led to 10 consecutive years of housing sales growth. Our current Fed is attempting to do the same: Slow the economy without pushing it into recession.

Annual existing home sales fall to 28-year low

How did home sales get here?

Since 2022, the number of homes sold began tumbling after the Fed announced its plans to raise interest rates in an effort to tame 40-year-high inflation.

The Fed stopped aggressively raising short-term interest rates this past summer. By then, mortgage rates more than doubled and approached 8% in October, according to Freddie Mac. Higher rates, in turn, increased monthly payments for new homeowners. In most markets, home prices have continued to increase, too.

NAR found this fall that U.S. homes haven't been this unaffordable since Ronald Reagan's presidency when 30-year mortgage rates hovered around 14% in 1984. The mix of higher prices and more expensive monthly mortgages fed this steep decline.

In November, USA TODAY looked at 10 markets across the country, including Des Moines, Iowa, below. That market was typical of the rest: High prices and higher interest rates severely cut into what the city's residents can afford.

Why home sales are falling

Housing experts have speculated in recent months that a handful of issues have kept prices high and deterred would-be buyers. Among them:

• Elevated prices. December's median sales price of $382,600 was the sixth consecutive month of year-over-year prices increases, according to the Realtors association.
• Tight inventories. There's a 3.2 months' supply of houses on the market based on the current sales pace. A better-balanced home market between buyers and sellers would have a four- to five-month supply.
• High mortgage rates. Potential buyers are the only ones reluctant to step into the housing market now. Homeowners who took advantage of historically low mortgage rates in recent years are not interested in taking on new mortgages, which might be more than double their current rates.

Where the most homes were sold in September

Nearly half the homes sold in the U.S. were sold in the South in December. Homes selling for between $250,000 and $500,000 represented the majority of purchases, but even that category was down 7.1% from the year before. Sales of homes under $100,000 fell the most (18%) while homes over $1 million rose 14% from December 2022.