Existing home sales rose a modest 1.9% in November, once again pushing prices up and reducing inventory, according to the National Association of Realtors.
The median price of existing homes for all housing types in November was $ 353,900, up 13.9% from November 2020 ($ 310,800), as prices rose in every region, with the highest rate of appreciation in the South. That marks 117 consecutive months of year-over-year increases, the longest streak on record.
Three of the top four regions in the United States saw monthly sales growth, while the fourth region was flat in November. Year over year, only one region saw an increase in sales, while the other three saw a decline in home sales.
Total closed existing home sales, including single-family homes, townhouses, condominiums and co-ops, increased 1.9% from October to a seasonally adjusted annual rate of 6.46 million in November . Sales are down 2.0% from a year ago (6.59 million in November 2020).
“Determined buyers were able to secure homes before mortgage rates rose further in the coming months,” said Lawrence Yun, chief economist of NAR. “Locking in a constant, firm mortgage payment has motivated many consumers who have grown weary of escalating rents over the past year. “
Yun predicts that the 30-year fixed mortgage rate will average 3.7% by the end of 2022. “Mortgage rates are expected to rise in 2022, however, I don’t expect the the impending increase is too dramatic, he said. “
The total building stock at the end of November stood at 1.11 million units, down 9.8% from October and 13.3% from a year ago (1.28 million) . The unsold inventory stands at a supply of 2.1 months at the current pace of sales, a decrease from the previous month and a year ago.
The median price of existing homes for all housing types in November was $ 353,900, up 13.9% from November 2020 ($ 310,800), as prices rose in every region, with the highest rate of appreciation in the southern region. That marks 117 consecutive months of year-over-year increases, the longest streak on record.
“Supply chain disruptions for building new homes and labor shortages have hampered the increase in inventories in the market,” Yun said. “As a result, house prices continue to climb due to near record levels of supply.”
Yun noted that inflation and the pace of price appreciation are expected to subside next year. Last week, NAR held its third annual housing forecast summit, featuring economists and housing experts whose consensus concluded that inflation would likely slow in 2022 to a rate of 4%, while the house prices are expected to increase at a moderate pace of 5.7%.
Properties typically remained on the market for 18 days in November, which equates to October, up from 21 days in November 2020. Eighty-three percent of homes sold in November were on the market for less than a month.
First-time home buyers accounted for 26% of sales in November, up from 29% in October and 32% in November 2020. NAR’s 2021 home buyers and sellers profile indicated that the annual share of first-time buyers was 34 %.
“Existing home sales for November show a continuation of trends that further push home ownership away from first-time buyers,” said Robert Frick, business economist at Navy Federal Credit Union.
He noted, “Inventories are lower, especially for lower priced homes, and prices continue to rise at an annualized rate of around 15%. Today, only 26% are first-time buyers, against 32% a year ago. The forecast calls for single-digit price increases next year, but the fundamentals of low supply, high demand and growing consumer wealth don’t appear to be easing anytime soon.
Individual investors or buyers of second homes, who make up many cash sales, bought 15% of homes in November, up from 17% in October and 14% in November 2020. Cash sales accounted for 24% of transactions in November. . , equal to the percentage of October, and up from 20% compared to November 2020.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in November, a percentage equal to the previous month and equal to November 2020.
According to realtor.com’s Market Trends report, the fastest growing year-over-year markets for newly listed homes are Milwaukee (+ 17.4%), Charlotte (+ 16.1%) and Buffalo (+ 13.5%). The markets that still see a decline in the number of newly listed homes compared to last year are Hartford (-20.2%), San Francisco (-19.1%) and San Jose (-16.2%).
According to Freddie Mac, the average commitment rate for a conventional 30-year fixed rate mortgage was 3.07% in November, equal to the October rate. The average engagement rate for the whole of 2020 was 3.11%.
Zillow’s senior economist Kwame Donaldson said that after a roller-coaster year, the annualized and seasonally adjusted sales rate is expected to end in 2021 at about the same level it started.
“The record monthly home price appreciation at the start of the year may have contributed to four consecutive monthly sales declines that began in 2021, likely discouraging buyers unaccustomed to such rapid gains and holding back worried sellers. to potentially miss future price growth, “he said.
He explained, “This monthly growth rate peaked in July, buyers and sellers got used to these higher prices, and existing home sales increased in the three months after August. Monthly appreciation slowed down further in November, which should attract more buyers, but stocks for sale also fell last month, so the increase in sales may be small. “
Donaldson added, “Sales of existing homes will rise in 2022 thanks to low mortgage rates, a healthy job market and moderate house price growth, but the series will be below all-time highs it reached in. 2005, just before the crash housing. ”
Single-family home sales reached 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 a year ago a year. The median price for existing single-family homes was $ 362,600 in November, up 14.9% from November 2020.
Sales of existing condominiums and co-ops were recorded at a seasonally adjusted annual rate of 710,000 units in November, up 4.4% from 680,000 in October and equal to a year ago. The median price of existing condominiums was $ 283,200 in November, an annual increase of 4.4%.
“As the year draws to a close, NAR is very proud of the work we have done to protect homeownership and the valuable investments made in our communities and infrastructure,” said NAR President Leslie. Rouda Smith, real estate agent in Plano, Texas. , and Associate Broker at Dave Perry-Miller Real Estate in Dallas. “We recognize that more efforts are needed and will continue to promote fair housing, work to increase the housing shortage and fight to dismantle discriminatory housing laws and outdated policies.”