In November, home sales saw a modest increase, despite rising prices and the highest mortgage rates of the year, as reported by the National Association of Realtors. Existing home sales, including single-family homes, townhomes, condos, and co-ops, rose 0.8% to an annualized rate of 3.82 million units, ending a five-month decline. However, sales were still down 7.3% from last year’s pace of 4.12 million units. NAR’s chief economist, Lawrence Yun, noted that lower mortgage rates in recent weeks could improve the housing market going forward.
The median home price in November hit $387,600, up 4% from the previous year, marking five straight months of year-over-year price increases. Yun emphasized that only a significant increase in housing supply will curb price growth. In comparison, prices have surged since November 2019, rising 42% in the Northeast, 35% in the Midwest, 50% in the South, and 47% in the West.
Although competition for homes has slightly eased, with fewer properties selling above the listing price, the market remains tight. Homes stayed on the market for an average of 25 days in November, slightly longer than in October but still considered a fast-paced market. Sales declined in the lower-priced segment (under $750,000) due to limited inventory, while higher-priced homes saw more transactions and price concessions.
Inventory challenges persisted, with 1.13 million units available at the end of November, down 1.7% from October. First-time buyers made up 31% of sales, a slight increase from the previous month, while all-cash sales accounted for 27% of transactions. Individual investors or second-home buyers bought 18% of homes sold in November.
As mortgage rates continue to fall, analysts expect more sellers to list their homes, boosting inventory and sales. Rates peaked at 7.79% in October but have since dropped to 6.95%, with the Fed signaling further rate cuts in the new year, which could further stimulate home sales.
