Sales of existing-homes inched up in November, breaking a streak of five consecutive monthly declines. While sales are still tracking below last year’s levels, the gap between 2022 and 2023 has narrowed considerably.
Existing-home sales grew 0.8% in November from the prior month, reaching a seasonally adjusted annual rate of 3.82 million, according to the National Association of Realtors. Compared to November 2022, existing home sales retreated 7.3%, down from 4.12 million.
Looking at the four major U.S. regions, sales slid in the Northeast and the West but improved in the South and the Midwest month over month.
“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 in a statement. “A marked turn can be expected as mortgage rates have plunged in recent weeks.”
Housing inventory fell 1.7% from October, with 1.13 million units available. Meanwhile, unsold inventory sat at a 3.5-month supply at the current sales pace, down from 3.6 months in October and 3.3 months in November 2022.
The median existing-home price for all housing types in November was $387,600, down from $391,800 in October but up 4% from November 2022’s $372,700. All four U.S. regions registered price increases.
“Home prices keep marching higher,” Yun added. “Only a dramatic rise in supply will dampen price appreciation.”
Sales were subdued in 2023 because of high mortgage rates and a lack of inventory
Overall, Lisa Sturtevant, chief economist at Bright MLS, expects to see 4.1 million home sales nationally by the end of 2023. It is significantly lower than the typical 5.2 million annual home sales that used to be common before the pandemic. Higher rates and lack of resale inventory dampened the housing market in 2023.
However, the 30-year fixed-rate mortgage fell below 7% for the first time since Aug. 10, averaging 6.95% as of Dec. 14.
“Falling rates will bring both more buyers and more sellers into the housing market,” Sturtevant said in a statement. “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.”
