Existing Sales Exploded In November

Existing home sales exploded in November despite rising rates.

Sales increased 4.8% to a seasonally adjusted annual rate of 4.15 million, according to the National Association of Realtors. They were up 6.1% YOY.

This is the first time in six months that the rate has surpassed four million.

All major regions experienced annual gains for both sales and price appreciation. Month-over-month, the South, Northeast, and Midwest saw increases, while the West stayed flat.

In October, analysts noted that increasing inventory contributed to rising sales. But November brought higher rates and fewer homes for sale, which were atypical circumstances for an increase.

The inventory of unsold existing homes fell by 2.9% from the month prior to 1.33 million, the equivalent of 3.8 months’ supply at the current monthly sales pace. It’s up 17.7% YOY.

“Home sales momentum is building. More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%,” said NAR Chief Economist Lawrence Yun. 

Buyers are “begrudgingly” beginning to accept that pandemic-era ultra-low rates are a thing of the past and the lock-in effect is weakening.

At the same time, the job market is faring well and unemployment is projected to stay historically low through next year. Potential buyers have a steady paycheck to rely on even with higher monthly payments — and equity to cash in on, Yun added.

“Existing homeowners are capitalizing on the collective $15 trillion rise in housing equity over the past four years to look for homes better suited to their changing life circumstances,” he said.