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A new report revealed that while home prices remain high, existing-home sales grew in November, breaking a streak of five consecutive monthly declines, according to the National Association of REALTORS. Among the four major U.S. regions, sales climbed in the Midwest and South but receded in the Northeast and West.
All four regions experienced year-over-year sales decreases.
“Existing home sales ticked up 0.8% in November to a level of 3.82 million annual home sales, increasing for the first time since May," said Realtor.com Sr. Economic Research Analyst Hannah Jones. "On a yearly basis, home sales were down 7.3%, the smallest annual drop since April 2022. Pending home sales data, which tends to lead existing home sales by one or two months, fell in October as mortgage rates reached 20-plus-year highs. Though housing affordability is likely to persist as a key challenge to prospective buyers next year, we expect that the market will see small wins with lower mortgage rates and softening home prices."
Key Findings:
- Existing-home sales edged higher by 0.8% in November to a seasonally adjusted annual rate of 3.82 million, finishing a five-month drop. Sales retreated 7.3% from one year ago.
- The median existing-home sales price rose 4.0% from November 2022 to $387,600, the fifth consecutive month of year-over-year price increases.
- The inventory of unsold existing homes slid 1.7% from the previous month to 1.13 million at the end of November, or the equivalent of 3.5 months' supply at the current monthly sales pace.
In addition, Jones revealed that "existing home sales fell annually in all four regions. The Midwest and the South saw existing home sales tick up 1.1% and 4.7%, respectively, relative to October, while the Northeast and the West saw month-over-month declines. All four regions saw existing home sale prices climb, ranging from 3.4% to 5.3% year-over-year."
Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums, and co-ops—elevated 0.8% from October to a seasonally adjusted annual rate of 3.82 million in November. Year-over-year, sales fell 7.3% (down from 4.12 million in November 2022).
"The latest weakness in existing home sales still reflects the buyer bidding process in most of October, when mortgage rates were at a two-decade high before the actual closings in November," said NAR Chief Economist Lawrence Yun. "A marked turn can be expected as mortgage rates have plunged in recent weeks."
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.95% as of December 14, falling below 7% for the first time since August 10. That's down from 7.03% the previous week but up from 6.31% one year ago.
"Home prices keep marching higher," said Yun. "Only a dramatic rise in supply will dampen price appreciation."
Total housing inventory registered at the end of November was 1.13 million units, down 1.7% from October but up 0.9% from one year ago (1.12 million). Unsold inventory sits at a 3.5-month supply at the current sales pace, down from 3.6 months in October but up from 3.3 months in November 2022.
The median existing-home price for all housing types in November was $387,600, an increase of 4.0% from November 2022 ($372,700). All four U.S. regions posted price increases.
"Though November’s data shows a market still struggling with affordability, the recent progress in inflation and decline in mortgage rates suggests that a shift is ahead in 2024," said Jones. "We expect existing home sales to remain steady in 2024, but lower mortgage rates, lower home prices, and lower rents will make housing slightly more navigable. Though a home purchase may still be out of reach for many buyers, the rental market could offer options. Rents fell annually for the 7th month in a row in November as multifamily construction activity moved through the pipeline and increased rental supply. A relatively high level of multi-family completions persisted in November, suggesting that further relief may be on the horizon for renters.”
To read the full report, including more data, charts, and methodology, click here.
