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Existing home sales inched up slightly in November, ending a five-month stretch of uninterrupted declines, and experts are predicting more gains as mortgage rate decreases settle in.
Sales of existing single-family homes edged up 0.8 percent between October and November, according to data released Wednesday by the National Association of Realtors, but were down 7.3 percent from November 2022.
The data from November is representative of the housing market before mortgage rates began to trend downward in December, spurring increased home buying activity. Housing market experts predicted an unseasonal increase in sales in the months to come now that rates have fallen, during what is usually an overwhelmingly slow period for the market.
“The latest weakness in existing home sales still reflects the buyer bidding process in most of October when mortgage rates were at a two-decade high before the actual closings in November,” said NAR Chief Economist Lawrence Yun. “A marked turn can be expected as mortgage rates have plunged in recent weeks.”
The 30-year fixed mortgage rate averaged 6.95 percent as of Dec. 14 according to Freddie Mac, the first time rates have fallen below 7 percent since August.
The median existing home sale price rose 4 percent between November 2022 and November 2023 according to the NAR, with all four major United States regions posting annual price increases.
“Home prices keep marching higher,” Yun said. “Only a dramatic rise in supply will dampen price appreciation.”
Existing home sales fell 2.1 percent on a monthly basis to an annual rate of 940,000 in the Northeast and were down 13 percent from a year ago, while the Midwest saw home sales rise 1.1 percent from the previous month, also to an annual rate of 940,000.
In the South, home sales improved 4.7 percent from October to an annual rate of 1.77 million during November, a 4.3 percent decline from the previous year, while the West saw sales droop 7.2 percent month over month to an annual rate of 640,000, down 8.6 percent from the year before.
Inventory of unsold existing homes slid 1.7 percent from the previous month to 1.13 million at the end of November, the equivalent of 3.5 months of supply at the current sales rate.
