Fueled by low mortgage interest rates and strong demand, existing home sales increased for a third straight month in November, according to the National Association of Realtors (NAR). However, supply has continued to lag due to ongoing supply-chain disruptions, keeping home price elevated and pricing out first-time and young buyers.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 1.9% to a seasonally adjusted annual rate of 6.46 million in November, the highest level since January. However, on a year-over-year basis, sales were 2.0% lower than a year ago, the fourth annual decline since August 2020.
The first-time buyer share fell to 26% in November, down from 29% in October and down from 32% a year ago. The November inventory level declined from 1.23 to 1.11 million units and is still down from 1.28 million units a year ago.
At the current sales rate, November unsold inventory sits at a 2.1-month supply, down from 2.3 month both last month and a year ago. This low supply of resale homes is good news for home construction.
Homes stayed on the market for an average of just 18 days in November, to the same as October and down from 21 days a year ago. In November, 83% of homes sold were on the market for less than a month.
The November all-cash sales share was 24% of transactions, equal to October’s share and up from 20% a year ago.
Tight supply continues to push up home prices. The November median sales price of all existing homes was $353,900, up 13.9% from a year ago, representing the 117th consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $283,200 in November was up 4.4% from a year ago.
Geographically, three of four regions saw an increase in existing home sales in November, ranging from 0.7% in the Midwest to 2.9% in the South. Sales in the Northeast remained flat in November. On a year-over-year basis, however, sales declined in three major regions, ranging from 0.7% in the Midwest to 11.6% in the Northeast.
Meanwhile, the Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI increased 7.5% from 116.5 to 125.2 in October. On a year-over-year basis, sales were 1.4% lower than a year ago per the NAR data.