Due to a lack of available homes for sale and mortgage rates that were, on average higher than they were a year earlier, home sales in the United States decreased in November for the tenth month in a row.
According to the National Association of Realtors, existing home sales dropped 7.7% from October to a seasonally adjusted annual pace of 4.09 million last month.
According to FactSet, that represents a weaker sales pace than economists had anticipated.
In addition, it means the longest run of monthly sales reductions since records began in 1999.
Sales fell 35.4% from November of the previous year.
Sales are presently moving at the weakest yearly pace since November 2010, when the home market was mired in severe depression due to the foreclosure crisis in the late 2000s, except for the sharp reduction in sales that happened in May 2020 at the start of the pandemic.
Despite the decline, home prices increased last month at a far slower rate than they had just a few months earlier.
November saw a 3.5% increase in the national median sales price of homes, reaching $370,700.
According to Lawrence Yun, the chief economist for the NAR, about a quarter of the homes sold last month brought in more than their asking price.
While there are fewer buyers and transactions, there are still some multiple offers, and homes are still selling quite quickly because of the restricted availability, according to Yun.
The latest indication of a widening downturn from the brisk sales pace at the beginning of the year, when mortgage rates were still meager, is the housing snapshot for November.
Take into account that in early January, the average interest rate for a 30-year mortgage was little, around 3%.
According to mortgage buyer Freddie Mac, it was at 6.31% last week, more than double the 3.12% average rate from a year ago.
Despite recent drops, the average mortgage rate was still 7.08% in early November.
Many prospective purchasers are deterred by the high mortgage rates and steadily growing housing prices.
According to Yun, the average interest rate on a 30-year mortgage might drop to 5.5% by the spring or summer of next year.
He said, “I don’t believe it’s unreasonable. And if that’s the case, I anticipate a gradual increase in sales activity in the housing market.
According to the NAR, homes sold on average 24 days after going on the market last month, an increase from 21 days in October.
Compared to before the epidemic, when homes often took longer than 30 days to sell off the market, that is still a reasonably speedy turnaround.
For the fourth straight month, there were fewer houses on the market.
By the end of November, 1.14 million residences were available for sale.
The current sales rate translates to 3.3 months’ worth of supply. There is a 5- to 6-month supply in a market where buyers and sellers are more evenly distributed.