Home sales rose more than expected in November, boosted by lower mortgage rates

According to the National Association of Realtors, sales of previously owned homes rose 4.8 percent in November compared to October. It put them at a seasonally adjusted, annualized rate of 4.15 million units.

Sales were up 6.1% compared to November 2023. That’s the third-fastest pace of the year and the biggest annual gain in three years.

This count is based on closings, so contracts were likely signed in September and October. Mortgage rates fell to an 18-month low in September but then rose in October.

“Home sales are picking up,” said Lawrence Yoon, NAR’s chief economist. “More buyers have entered the market as the economy continues to grow jobs, housing inventory is higher than a year ago, and consumers have gotten used to the new normal of mortgage rates between 6% and 7%. ”

The supply of homes for sale at the end of October was 1.33 million units, up 17.7 percent from November last year. At the current sales pace, this represents 3.8 months of supply. Six months supply is considered balanced between buyer and seller.

This tight supply continued to put pressure on prices. The median price in November was $406,100, up 4.7% year over year. That annual comparison is rising again. Prices rose 4 percent annually in October.

Price increases were strongest in the Northeast and Midwest at 9.9% and 7.3%, respectively. About 18% of homes sold above list price.

First-time home buyers gained some ground, representing 30% of November sales, up from 27% in October, but down slightly from a year ago. Cash is still king at 25 percent of sales. However, investors pulled back only 13% on the sale, down from 18% in November last year.

“Is this a sign that investors or more downsizers think house prices are over the top? Or is there another reason why rents aren’t going up anymore?” Yun inquired.

Sales at the high end of the market continue to gain the most. Sales of homes priced over $1 million rose 24.5 percent compared to November of last year, while sales of homes priced under $100,000 fell 24.1 percent.

Mortgage rates are higher again today, with the average rate on a 30-year fixed up 21 basis points on Wednesday, after the latest Federal Reserve A smaller Fed rate cut is now expected next year.