Sales of previously owned homes in November were up 1.9% from October to 6.46 million units, according to the seasonally adjusted tally from the National Association of Realtors. Sales were down 2.0% from November 2020.
These sales reflect house closings, hence contracts that were probably signed in September and October.
Regionally, month-to-month sales in the Northeast were unchanged. In the Midwest they increased 0.7% and in the South they increased 2.9%. In the West, sales increased 2.3%.
According to NAR chief economist Lawrence Yun, sales have likely increased due to the strengthening labor market and concerns among potential buyers that mortgage rates will be significantly higher next year.
At the end of November, 1.11 million homes were for sale, down 13% year on year. At the current sales rate, this represents a 2.1 month supply.
“New announcements are hitting the market, but they are quickly picked up,” said Yun, who added that he expects inventory to drop again in December.
This tight supply continued to exert upward pressure on home prices. The median price of an existing home sold in November was $ 353,900. This is a gain of 13.9% from November 2020. Price gains are slowing from previous annual gains by about 20%.
Sales were strongest in the more expensive categories, with homes priced between $ 750,000 and $ 1 million increasing 37% year-over-year and those priced above $ 1 million. of dollars increasing by 50%. In comparison, homes priced between $ 100,000 and $ 250,000 fell 19%. The supply is the lowest on the lower end of the market.
The market is also changing very rapidly, with the average length of time a home stays on the market being only 18 days.
The share of sales to first-time buyers was only 26%, against 32% in November 2020. The share of sales to investors was 15%, against 14% the previous year.
Mortgage rates haven’t helped buyers much either. While rates are still historically low, the average rate for the popular 30-year fixed mortgage started in September at 2.92% and ended in October at 3.22%, according to Mortgage News Daily. This removed significant purchasing power, especially for beginners or first-time buyers.
“The prospect of higher interest rates in 2022 hastens the decision of buyers in an otherwise slower season,” said George Ratiu, senior economist at Realtor.com. “However, the low number of homes for sale remains the main challenge, confusing both existing homeowners looking for their next home and first-time homebuyers looking for a place of their own.”