NAR: Existing Home Sales Rose 1.9% in Nov.

It’s the third straight month for increased sales. However, prices jumped 13.9% higher year-to-year as the inventory of for-sale homes decreased 13.3%.

WASHINGTON – Existing-home sales rose again in November – three consecutive months of increases – according to the National Association of Realtors® (NAR). Three of the four major U.S. regions NAR tracks within the report reported monthly sales growth, while the fourth region held steady. Year-over-year, only one region saw a rise in sales; three others saw declines.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – grew 1.9% from October to a seasonally adjusted annual rate of 6.46 million in November. Sales fell 2.0% 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,” says Lawrence Yun, NAR’s chief economist, who says many Americans “grew weary of escalating rents over the last year.”

Yun expects mortgage rates to rise going into 2022, but he doesn’t “expect the imminent increase to be overly dramatic.” He forecasts the 30-year fixed mortgage rate will average 3.7% by the end of 2022.

Total for-sale housing inventory at the end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million) – a 2.1-month supply at the current sales pace, which is down both month-to-month and year-to-year.

The median existing-home price for all housing types in November was $353,900, up 13.9% from November 2020 ($310,800). Prices increased in each region, with the highest pace of appreciation in the South. It marks 117 straight months of year-over-year increases, and the longest-running streak on record.

“Supply-chain disruptions for building new homes and labor shortages have hindered bringing more inventory to the market,” says Yun. “Therefore, housing prices continue to march higher due to the near record-low supply levels.”

Yun says inflation and the pace of price appreciation should subside next year. At NAR’s third annual Real Estate Forecast Summit, a consensus of economists and housing experts found inflation would likely ease in 2022 at a 4% rate, with home prices expected to rise 5.7%.

In November, properties typically remained on the market for 18 days, the same as October and down from 21 days in November 2020. More than four out of five November listings (83%) were on the market for less than a month.

First-time buyers were responsible for 26% of sales in November, down from 29% in October and 32% in November 2020. Individual investors or second-home buyers, responsible for many cash sales, purchased 15% of homes in November, down from 17% in October and up from 14% in November 2020. All-cash sales accounted for 24% of November transactions, equal to October’s percentage and up from 20% from November 2020.

Distressed sales – foreclosures and short sales – represented less than 1% of sales in November, equal to the percentage seen a month prior and equal to November 2020.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.07% in November, equal to October’s rate. The average commitment rate across all of 2020 was 3.11%.

Single-family and condo/co-op sales: Single-family home sales rose to a seasonally adjusted annual rate of 5.75 million in November, up 1.6% from 5.66 million in October and down 2.2% from one year ago. The median existing single-family home price was $362,600 in November, up 14.9% from November 2020.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 710,000 units in November, up 4.4% from 680,000 in October and equal to one year ago. The median existing condo price was $283,200, an annual increase of 4.4%.

Regional breakdown: Existing-home sales in the Northeast were flat compared to the prior month, neither climbing nor falling in November at an annual rate of 760,000, which is an 11.6% decrease from November 2020. The median price in the Northeast was $372,500, up 4.7% year-to-year.

Existing-home sales in the Midwest ticked up 0.7% to an annual rate of 1,520,000 in November, a 0.7% drop from a year ago. The median price in the Midwest was $260,100, a 9.0% jump from November 2020.

Existing-home sales in the South grew 2.9% in November – an annual rate of 2,850,000, and rise of 1.1% from one year ago. The median price in the South was $318,900, an 18.4% surge year-to-year.

Existing-home sales in the West increased 2.3%, reaching an annual rate of 1,330,000 in November and down 3.6% from one year ago. The median price in the West was $507,200, up 8.4% from November 2020.

© 2021 Florida Realtors®

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