Despite higher mortgage rates and elevated home prices, existing home sales jumped to an 8-month high in November, marking the second month of annual increase in more than three years, according to the聽
According to analysis from the , while inventory improves and the Fed continues lowering rates, the market faces headwinds as mortgage rates are expected to stay above 6% for longer due to an anticipated 聽in 2025. The prolonged rates may continue to discourage homeowners from trading existing mortgages for new ones with higher rates, keeping supply tight and prices elevated. However, as mortgage rates continue trending lower, the gradual improvement in inventory should help slow home price growth and enhance affordability. As such, the recent gains for existing home sales may give way in the coming months of data.
Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 4.8% to a seasonally adjusted annual rate of 4.15 million in November, the highest level since March 2024. On a year-over-year basis, sales were 6.1% higher than a year ago, the largest annual gain since June 2021.
The first-time buyer share rose to 30% in November, up from 27% in October but down from 31% in November 2023.
The existing home inventory level fell from 1.37 million in October to 1.33 million units in November but is up 17.7% from a year ago. At the current sales rate, November unsold inventory sits at a 3.8-months supply, down from 4.2-months last month but up 3.5-months a year ago. This inventory level remains low compared to balanced market conditions (4.5 to 6 months鈥� supply) and illustrates the long-run need for more home construction.
Homes stayed on the market for an average of 32 days in November, up from 29 days in October and 25 days in November 2023.
The November all-cash sales share was 25% of transactions, down from 27% experienced in both October 2024 and November 2023. All-cash buyers are less affected by changes in interest rates.
The November median sales price of all existing homes was $406,100, up 4.7% from last year. This marked the 17th consecutive month of year-over-year increases. The median condominium/co-op price in November was up 2.8% from a year ago at $359,800. This rate of price growth will slow as inventory increases.
Geographically, three of four regions saw an increase in existing home sales in November, ranging from 5.3% in the Midwest to 8.5% in the Northeast. Sales in the West stayed unchanged in November. On a year-over-year basis, sales grew in all four regions, ranging from 3.3% in the South to 14.9% in the West.
The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 75.9 to 77.4 in October due to improved inventory. On a year-over-year basis, pending sales were 5.4% higher than a year ago per National Association of Realtors data.
