Existing-home sales grew in November, breaking a streak of five consecutive monthly declines, according to the National Association of REALTORS® (NAR). 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.
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 Dec. 14, falling below 7% for the first time since Aug. 10. That’s down from 7.03% the previous week but up from 6.31% one year ago.
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% from November 2022 ($372,700). All four U.S. regions posted price increases.
“Home prices keep marching higher,” Yun added. “Only a dramatic rise in supply will dampen price appreciation.”
“U.S. home sales remain on pace for the worst year seen in decades. It is unlikely 2024 will prove to be as bad, and we believe the market will slowly begin to tick up through the year, keeping a slow pace in step with the gradual reductions in the Fed rate and lower mortgage rates as the months tick past,” commented CoreLogic Chief Economist Dr. Selma Hepp.
Bright MLS Chief Economist Dr. Lisa Sturtevant had this to say in advance of the report:
“Home sales are still tracking below last year’s levels, but the gap has narrowed considerably,” she noted. “In November and December 2022, closed sales fell dramatically as fast-rising interest rates led many prospective homebuyers to pause their home search. Mortgage rates are higher now than they were a year ago, but rates have been rising steadily, and not suddenly, and consumers have adjusted their expectations.
“In early 2023, homebuyers returned to the market in full force after sidelining themselves over the winter holidays. We are likely to see an early 2024 surge in home-buying activity, as well, this time as a result of falling interest rates. After peaking at a 23-year high in early November, the average rate on a 30-year fixed-rate mortgage has declined for six consecutive weeks. Rates should come down further and will be below 7% after the new year. These lower rates will bring both active buyers and sellers into the market, eager to get out ahead of the traditionally busier spring market.
“Overall, there is expected to be 4.1 million home sales nationally in 2023, significantly lower than the 5.2 million annual homes sales that had been typical prior to the pandemic. Sales were subdued this year because of higher rates, but a lack of inventory has been the main obstacle to the housing market in 2023.
“Falling rates will bring both more buyers and more sellers into the housing market. According to Bright MLS forecasts, there will be 4.6 million home sales in 2024, and inventory will increase by about 8% by the end of the year.”
Key highlights:
- 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% 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.
