Existing-home sales rose in November, denoting three consecutive months of increases, according to the National Association of Realtors (NAR). Three of the four major U.S. regions reported growth in monthly sales, while the fourth region held steady in November. From a year-over-year perspective, only one region experienced a rise in sales as the three others saw home sales decline.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 1.9 percent from October to a seasonally adjusted annual rate of 6.46 million in November. Sales fell 2.0 percent from a year ago (6.59 million in November 2020).
“Determined buyers were able to land housing before mortgage rates rise further in the coming months,” said Lawrence Yun, NAR’s chief economist. “Locking in a constant and firm mortgage payment motivated many consumers who grew weary of escalating rents over the last year.
“Mortgage rates are projected to jump in 2022, however, I don’t expect the imminent increase to be overly dramatic.”
Yun forecasts the 30-year fixed mortgage rate to average at 3.7 percent by year-end of 2022.
Total housing inventory at the end of November amounted to 1.11 million units, down 9.8 percent from October and down 13.3 percent from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago.
The median existing-home price for all housing types in November was $353,900, up 13.9 percent from November 2020 ($310,800), as prices increased in each region, with the highest pace of appreciation in the South region. This marks 117 straight months of year-over-year increases, the longest-running streak on record.
“Supply-chain disruptions for building new homes and labor shortages have hindered bringing more inventory to the market,” said Yun. “Therefore, housing prices continue to march higher due to the near record-low supply levels.”
Yun noted that inflation and the pace of price appreciation is expected to subside next year. Last week, NAR held its third annual Real Estate Forecast Summit, featuring economists and housing experts whose consensus found inflation would likely ease in 2022 at a 4 percent rate, while home prices are expected to rise at a moderate pace of 5.7 percent.
First-time buyers were responsible for 26 percent of sales in November, down from 29 percent in October and from 32 percent in November 2020. Individual investors or second-home buyers, who make up many cash sales, purchased 15 percent of homes in November, down from 17 percent in October and up from 14 percent in November 2020.
According to realtor.com’s Market Trends Report, the markets seeing the largest year-over-year growth in newly listed homes include Milwaukee (+17.4 percent), Charlotte (+16.1 percent) and Buffalo (+13.5 percent). Markets still seeing a decline in newly listed homes compared to last year are Hartford (-20.2 percent), San Francisco (-19.1 percent), and San Jose (-16.2 percent).
Regional Breakdown
Existing-home sales in the Northeast were flat compared to the prior month, neither climbing or falling in November, and recorded an annual rate of 760,000, which is an 11.6 percent decrease from November 2020. The median price in the Northeast was $372,500, up 4.7 percent from one year ago.
Existing-home sales in the Midwest ticked up 0.7 percent to an annual rate of 1,520,000 in November, a 0.7 percent drop from a year ago. The median price in the Midwest was $260,100, a 9.0 percent jump from November 2020.
Existing-home sales in the South grew 2.9 percent in November, registering an annual rate of 2,850,000, a rise of 1.1 percent from one year ago. The median price in the South was $318,900, an 18.4 percent surge from one year prior.
Existing-home sales in the West increased 2.3 percent, reaching an annual rate of 1,330,000 in November, down 3.6 percent from one year ago. The median price in the West was $507,200, up 8.4 percent from November 2020.