Existing-home sales fell in November, snapping a five-month streak of month-over-month gains, according to the National Association of REALTORS(r). All major regions either took a step back or held steady in terms of their respective month-over-month status, but each of the four areas experienced significant year-over-year growth.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 2.5% from October to a seasonally-adjusted annual rate of 6.69 million in November. However, sales in total rose year-over-year, up 25.8% from a year ago (5.32 million in November 2019).
“Home sales in November took a marginal step back, but sales for all of 2020 are already on pace to surpass last year’s levels,” said Lawrence Yun, NAR’s chief economist. “Given the COVID-19 pandemic, it’s amazing that the housing sector is outperforming expectations.”
Yun notes that job recoveries have stalled in the past few months, and fast-rising coronavirus cases along with stricter lockdowns have weakened consumer confidence.
“Circumstances are far from being back to the pre-pandemic normal,” he said. “However, the latest stimulus package and with the vaccine distribution underway, and a very strong demand for homeownership still prevalent, robust growth is forthcoming for 2021.”
Bill Banfield, Rocket Mortgage Executive Vice President of Capital Markets, offered the following insight on the report.
“The big story of 2020 in the housing market has been the fact that not even a pandemic could dampen Americans’ drive for a new space to call home. The small seasonal sales decline from this report is overshadowed by surging home prices that have largely been offset by record low interest rates, as well as the continued strain from a lack of inventory.”
The median existing-home price for all housing types in November was $310,800, up 14.6% from November 2019 ($271,300), as prices increased in every region.
November’s national price increase marks 105 straight months of year-over-year gains.
Total housing inventory at the end of November totaled 1.28 million units, down 9.9% from October and down 22% from one year ago (1.64 million). Unsold inventory sits at an all-time low 2.3-month supply at the current sales pace, down from 2.5 months in October and down from the 3.7-month figure recorded in November 2019.
Properties typically remained on the market for 21 days in November, seasonally even with October and down from 38 days in November 2019. Seventy-three percent of homes sold in November 2020 were on the market for less than a month.
“The positive momentum that home sellers are seeing will carry on well into the new year,” Yun predicted, citing low mortgage rates and remote-work flexibilities.
Yun’s projections of a continued housing market rebound were the consensus among economic and housing experts during NAR’s Real Estate Forecast Summit, held earlier this month. Industry insiders in attendance agreed that mortgage rates will hover around 3% in the coming year, and said they expect an annual median home price increase of 8.0%.
“Housing affordability, which had greatly benefitted from falling mortgage rates, are now being challenged due to record-high home prices,” Yun said. “That could place strain on some potential consumers, particularly first-time buyers.”
First-time buyers were responsible for 32% of sales in November, equal to the percentage seen in both October 2020 and November 2019. NAR’s 2020 Profile of Home Buyers and Sellers–released last month–revealed that the annual share of first-time buyers was 31%.
Individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in November, identical to the share recorded in October 2020 and a small decline from 16% in October 2019. All-cash sales accounted for 20% of transactions in November, up from 19% in October but unchanged from November 2019.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in November, equal to October’s percentage but down from 2% in November 2019.
“While we still face economic and health challenges ahead, I have zero doubt that the nation will continue to recover from this pandemic,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and broker/owner of Prominent Properties Sotheby’s International Realty. “Whether it’s through volunteering or philanthropy, or helping a given buyer secure that dream home, Realtors® have stepped up in a major way and we will continue with those efforts in 2021 and beyond.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 2.77% in November, down from 2.83% in October. The average commitment rate across all of 2019 was 3.94%.
Single-family and Condo/Co-op Sales
Single-family home sales sat at a seasonally-adjusted annual rate of 5.98 million in November, down 2.4% from 6.13 million in October, and up 25.6% from one year ago. The median existing single-family home price was $315,500 in November, up 15.1% from November 2019.
Existing condominium and co-op sales were recorded at a seasonally-adjusted annual rate of 710,000 units in November, down 2.7% from October and up 26.8% from one year ago. The median existing condo price was $271,400 in November, an increase of 9.5% from a year ago.
Regional Breakdown
Median home prices increased at double-digit rates in each of the four major regions from one year ago.
November 2020 saw existing-home sales in the Northeast drop 2.2%, recording an annual rate of 880,000, a 25.7% increase from a year ago. The median price in the Northeast was $354,100, up 17.4% from November 2019.
Existing-home sales fell 2.5% in the Midwest to an annual rate of 1,590,000 in November, but up 24.2% from a year ago. The median price in the Midwest was $239,100, a 14.6% increase from November 2019.
Existing-home sales in the South decreased 3.8% to an annual rate of 2.82 million in November, up 25.9% from the same time one year ago. The median price in the South was $270,000, a 15.0% increase from a year ago.
Existing-home sales in the West were unchanged from last month, recording an annual rate of 1,400,000 in November, a 27.3% increase from a year ago. The median price in the West was $467,600, up 13.8% from November 2019.
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