Buyers adjust to a new mortgage rate normal, boosting sales while inventory remains tight
The pace of home resales rebounded in November, even as mortgage rates edged higher, according to the latest data from the National Association of Realtors® (NAR).
Existing-home sales, including single-family homes, townhomes, condominiums, and co-ops, rose by 4.8% from October to a seasonally adjusted annual rate of 4.15 million. Year-over-year, sales increased by 6.1% (3.91 million) from November 2023.
NAR chief economist Lawrence Yun attributed the rebound to improving economic conditions and growing consumer adaptability.
“Home sales momentum is building,” Yun said in the report. “More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%.”
Freddie Mac reported that the average 30-year fixed-rate mortgage stood at 6.6% as of December 12, slightly down from the previous week’s 6.69% and from 6.95% a year ago. NerdWallet mortgage expert Holden Lewis noted that part of November’s sales increase was influenced by delays caused by hurricanes in October.
“Some of the increase can be attributed to hurricanes Helene and Milton, which postponed some closings from October to November,” said Lewis. “The supply of homes for sale fell to its lowest level since May, which is a sign that people are eagerly buying what's available as long as it's in decent shape and it's affordable at current interest rates and prices.”
Inventory and pricing trends
Housing inventory at the end of November was 1.33 million units, a 2.9% decline from October but a 17.7% rise compared to a year ago. The unsold inventory represents a 3.8-month supply at the current sales pace, slightly below October’s 4.2 months but above November 2023’s 3.5 months.
The median price for existing homes reached $406,100 in November, up 4.7% year-over-year, with all four major US regions recording price gains. Single-family homes saw a median price of $410,900, a 4.8% annual increase, while condominium and co-op prices rose by 2.8% to $359,800.
“Existing homeowners are capitalizing on the collective $15 trillion rise in housing equity over the past four years to look for homes better suited to their changing life circumstances,” Yun said.
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Single-family home sales increased by 5% month-over-month to an annual rate of 3.76 million, a 7.4% rise from November 2023. In contrast, condominium and co-op sales rose by 2.6% month-over-month to an annual rate of 390,000 units, but declined by 4.9% compared to a year earlier.
First-time buyers accounted for 30% of sales in November, up from 27% in October but slightly below the 31% share seen a year earlier. Cash sales made up 25% of transactions, while individual investors or second-home buyers purchased 13%, both figures showing declines from previous months.
Distressed sales, including foreclosures and short sales, held steady at 2% of total transactions, unchanged from the previous month and the prior year.
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