Sales of pre-owned homes in the United States saw a boost in November, marking the quickest pace since March. Homebuyers seemed more motivated due to a wider array of properties on the market, despite a slight increase in mortgage rates. The National Association of Realtors reported a 4.8% surge in existing home sales last month, reaching a seasonally adjusted annual rate of 4.15 million. This was a significant 6.1% rise compared to the same period the previous year, marking the most substantial year-over-year increase since June 2021. The latest figures surpassed economists’ expectations of 4.1 million sales, as per FactSet data.
Home prices continued to climb for the 17th consecutive month on an annual basis. The national median sales price jumped by 4.7% from the previous year, now standing at $406,100. Despite the positive momentum seen in November and October, home sales were still below the pace of the previous year, which had hit a nearly 30-year low. Lawrence Yun, the NAR’s chief economist, commented, “Looks like we won’t match last year in terms of the annual total, so it will be the lowest home sales since 1995.”
The combination of elevated mortgage rates and soaring prices has made homeownership unattainable for many potential buyers. After the Federal Reserve’s first interest rate cut in more than four years in September, the average rate on a 30-year mortgage temporarily dipped slightly above 6%. However, it has steadily climbed since then. Buyers who could afford the homes for sale benefited from a rise in available properties. By the end of November, there were 1.33 million unsold homes, marking a 2.9% decrease from October but a significant 17.7% increase from the same period last year, according to NAR.
This resulted in a 3.8-month supply at the current sales pace, indicating a slight decrease from the 4.2-month supply at the end of October last year, yet an increase from the 3.5-month pace recorded in November the previous year. Typically, a 5- to 6-month supply is deemed a balanced market that caters to both buyers and sellers.
In conclusion, the housing market in the U.S. showed signs of improvement in November, with a notable increase in home sales and prices. However, challenges such as high mortgage rates and escalating prices continue to hinder many individuals from achieving homeownership. The availability of properties on the market has slightly increased, providing some relief to potential buyers. Despite the positive trends observed in November, the housing market has not yet fully recovered to the levels seen in previous years, indicating a need for continued monitoring and support to ensure sustainable growth in the sector.
