Thursday, April 18, 2024
Real Estate

Existing home sales rise in November, ending a five-month decline

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Existing home sales in November saw an uptick, putting an end to a five-month consecutive decline, as reported by the National Association of Realtors® (NAR). The report highlighted a nuanced pattern across the nation’s four major regions, where sales ascended in the Midwest and South but faltered in the Northeast and West. All regions experienced a decline in year-over-year sales figures.

The total count of existing home sales, encompassing completed transactions involving single-family residences, townhomes, condominiums, and co-ops, displayed a modest surge of 0.8% from October, achieving a seasonally adjusted annual rate of 3.82 million in November. However, the year-over-year comparison revealed a 7.3% decrease in sales, dropping from 4.12 million in November 2022.

NAR's Chief Economist, Lawrence Yun, pointed out, “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. A marked turn can be expected as mortgage rates have plunged in recent weeks.”

According to data from Freddie Mac, as of December 14, the 30-year fixed-rate mortgage averaged 6.95%, marking a notable decline below the 7% threshold for the first time since August. This decrease contrasts with the 7.03% recorded in the preceding week but remains higher than the 6.31% observed a year ago.

The inventory of available unsold existing homes by the conclusion of November totaled 1.13 million units, representing a marginal 1.7% decline from October. This figure showed a marginal 0.9% increase from the prior year (1.12 million). The unsold inventory currently equates to a 3.5-month supply based on the prevailing sales pace, marking a slight reduction from 3.6 months in October but an increase from 3.3 months noted in November 2022.

During November, the median price of existing homes across all housing types surged to $387,600, marking a 4.0% increase from November 2022, which signifies the fifth consecutive month of year-over-year price hikes. This steadfast rise in prices was evident across all four geographical regions in the United States.

“Home prices keep marching higher,” Yun added. “Only a dramatic rise in supply will dampen price appreciation.”

The Realtors® Confidence Index divulged that properties typically lingered on the market for 25 days in November, slightly higher than the 23 days recorded in October and 24 days noted in November 2022. Notably, 62% of homes sold during November found buyers within a month of being listed.

In terms of buyer demographics, first-time buyers accounted for 31% of sales in November, marking an increase from 28% in both October 2023 and November 2022, as per the NAR's 2023 Profile of Home Buyers and Sellers, unveiled in November.

Cash transactions constituted 27% of total sales in November, a marginal decrease from 29% in October but an increase from 26% in November 2022. Individual investors or second-home buyers, majorly contributing to cash sales, acquired 18% of homes in November, showcasing an upturn from 15% in October and 14% a year prior.

Distressed sales, encompassing foreclosures and short sales, accounted for a mere 1% of transactions in November, maintaining consistency with the figures from the previous month and the corresponding period last year.

The data also highlighted specific sales trends concerning single-family homes and condominiums or co-ops. Single-family home sales rose to a seasonally adjusted annual rate of 3.41 million in November, marking a 0.9% increase from October but indicating a 7.3% decline from the previous year. Concurrently, the median existing single-family home price reached $392,100 in November, denoting a 3.5% surge from November 2022.

In contrast, existing condominium and co-op sales remained stagnant at a seasonally adjusted annual rate of 410,000 units in November, aligning with October figures but displaying a 6.8% decrease from one year ago. The median existing condo price recorded at $350,100 in November, representing an 8.6% upswing from the previous year's $322,400.

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