More people bought homes in November than they did each of the previous five months.
Although sales of existing homes were 7.3% less year over year, they edged 0.8% higher month over month. This wraps up a five month decline, according to the latest report from the National Association of Realtors (NAR).
“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,” NAR Chief Economist Lawrence Yun said. “A marked turn can be expected as mortgage rates have plunged in recent weeks.”
Single family home sales rose to a seasonally adjusted annual rate of 3.41 million in November, up 0.9% from October and climbing in the Midwest and South but receding in the Northeast and West.
NAR has forecasted 4.71 million existing-home sales in 2024, up 13.5% from the 4.1 million anticipated in 2023.
“US home sales remain on pace for the worst year seen in decades,” CoreLogic Chief Economist Dr. Selma Hepp said. “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.”
Among homes sold, 62% were on the market less than a month and 31% were to first-time home buyers, up from 28% in October 2023 and November 2022.
All-cash sales accounted for 27% of transactions in November, down from 29% in October but up from 26% in November 2022. Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in November, up from 15% in October and 14% one year ago. Short sales and foreclosures were virtually unchanged, representing 1% of the month’s sales in November.
Meanwhile, home prices are still on the up and up. All four U.S. regions posted price increases. “Home prices keep marching higher,” Yun pointed out. “Only a dramatic rise in supply will dampen price appreciation.”
The median existing-home sales price rose 4% to $387,600, making November the fifth consecutive month of YOY price increases.
The inventory of unsold existing homes slid 1.7% from October to 1.13 million at the end of November, or the equivalent of 3.5 months’ supply at the current monthly sales pace.
