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U.S. existing home sales edged higher in November, rising 0.5% from October to a seasonally adjusted annual rate of 4.13 million units, according to data released Friday by the National Association of Realtors (NAR). The modest monthly increase came despite a year-over-year decline of 1%, marking the first annual decrease since May.
The November sales figure fell slightly short of economists’ expectations of 4.14 million units, as tracked by FactSet. Through the first 11 months of 2023, home sales are down 0.5% compared to the same period last year, suggesting that the residential real estate market continues to face headwinds.
“It’s possible that 2025, unless December figures really improve, we may be technically slightly down from one year ago,” said Lawrence Yun, NAR’s chief economist. Yun specifically pointed to weaker demand for condominiums as a drag on overall sales, noting that condo sales have fallen 6% year-to-date.
Despite the sluggish sales pace, home prices continued their upward trajectory. The national median sales price hit $409,200 in November, a 1.2% increase from a year earlier and an all-time high for any November in records dating back to 1999. This marks the 29th consecutive month of year-over-year price increases, reflecting the persistent imbalance between supply and demand.
The housing market has been in a prolonged slump since 2022, when mortgage rates began climbing from historic lows. Last year, sales of previously occupied homes sank to their lowest level in nearly 30 years. The market has essentially been stuck at around a 4-million annual pace since 2023, well below the historical norm of 5.2 million units.
A temporary boost came this fall when the average rate on a 30-year mortgage declined to 6.17% at the end of October, reaching its lowest level in more than a year. While rates have remained relatively stable near that level in recent weeks, affordability remains a significant challenge for many potential buyers, particularly first-time homeowners who don’t have existing home equity to leverage.
The inventory situation continues to exacerbate affordability issues. There were 1.43 million unsold homes at the end of November, down 5.9% from October but up 7.5% from November last year. Despite the year-over-year improvement, current inventory levels remain well below the pre-pandemic norm of approximately 2 million homes.
November’s supply represents 4.2 months of inventory at the current sales pace, still below the 5-6 month supply traditionally considered indicative of a balanced market between buyers and sellers.
First-time buyers continue to face particularly difficult circumstances. They accounted for 30% of home sales last month, well below their historical representation of 40%. An annual NAR survey revealed an even more concerning trend: first-time buyers represented just 21% of home purchases between July 2024 and June 2025, an all-time low, while their average age rose to a record-high of 40.
Economic uncertainty and concerns about the job market are also keeping many prospective buyers on the sidelines, further dampening sales activity.
Looking ahead, Yun forecasts a 14% increase in existing U.S. home sales next year, a considerably more optimistic outlook than other housing economists whose projections range from 1.7% to 9% growth. Most economists expect the average 30-year mortgage rate to remain slightly above 6% in the coming year, which could continue to challenge market affordability.
The homes purchased in November likely went under contract in September and October, when 30-year mortgage rates ranged between 6.17% and 6.5%, according to Freddie Mac data, indicating that recent sales reflect decisions made when rates had already begun their recent decline.
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9 Comments
Interesting to see home sales still struggling despite the price increases. I wonder what factors are driving this dynamic – is it affordability, lack of inventory, or other market forces?
Good point. Affordability seems to be a major factor, with higher prices and mortgage rates impacting demand. It will be important to watch how the market evolves in 2024 and beyond.
The condo segment seems to be a particular weak spot – I’m curious to learn more about the reasons behind that. Are buyers shifting preferences towards single-family homes, or are there other factors at play?
That’s a good observation. The condo market decline could indicate broader shifts in housing preferences, or potentially some unique headwinds for that segment. More analysis on the underlying drivers would be helpful.
It will be interesting to see how the residential real estate market performs in 2024 and whether the current headwinds ease. Factors like interest rates, inventory levels, and economic conditions will likely play a big role.
Agreed. The housing market is often seen as a leading indicator, so its trajectory in 2024 could provide valuable insights into the broader economic outlook.
Overall, this data paints a somewhat mixed picture of the US housing market. While the monthly increase in sales is encouraging, the broader year-over-year decline and new price records indicate an ongoing need for close monitoring and analysis.
The divergence between rising prices and declining sales volume is puzzling. Is this reflective of a market that is still imbalanced, with limited supply unable to keep up with demand? Or are there other factors at play?
A new home price record in November is noteworthy, though the overall sales trend is still down year-over-year. This seems to suggest an ongoing imbalance between supply and demand in the housing market.