Sales of previously owned homes rose 4.8% in November compared with October, according to the National Association of Realtors. That put them at a seasonally adjusted, annualized rate of 4.15 million units.
Sales were 6.1% higher than November 2023. This is the third-highest pace of the year and the largest annual gain in three years.
This count is based on closings, so contracts were likely signed in September and October. Mortgage rates had fallen to an 18-month low in September but then shot higher in October.
“Home sales momentum is building,” said Lawrence Yun, chief economist for the NAR. “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%.”
The supply of homes for sale at the end of October was 1.33 million units, up 17.7% from November of last year. At the current sales pace, that represents a 3.8-month supply. A 6-month supply is considered balanced between buyer and seller.
That 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 gaining again. Prices were up 4% annually in October.
Price gains were strongest in the Northeast and Midwest, at 9.9% and 7.3% respectively. Roughly 18% of homes were sold above list price.
First-time homebuyers gained some ground, representing 30% of November sales, up from 27% in October but slightly lower than a year ago. Cash is still king at 25% of sales. Investors, however, pulled back at just 13% of sales, down from 18% in November of last year.
“Is this an indication where investors or more number-crunching people think that home prices are at the top? Or is another reason that rents are no longer rising?” Yun queried.
The biggest sales gains continue to be on the higher end of the market. Sales of homes priced over $1 million surged 24.5% from November of last year, while sales of homes priced below $100,000 dropped 24.1%.
Mortgage rates are higher again today, with the average rate on the 30-year fixed surging 21 basis points Wednesday, following the latest Federal Reserve meeting. Fewer Fed rate cuts are now expected next year.
