Simultaneously, the median price of existing homes in November rose to $387,600, a 4% increase compared to the same period last year. This marks the highest November price since NAR began tracking this data, indicating a gradual recovery in the market with increased activity and buyer interest.
However, despite the growth in existing home sales in November, real estate agents remain cautious about the market recovery. Lawrence Yun, Chief Economist at NAR, stated that this growth is not statistically significant and can be considered as statistical noise. He emphasized that even though interest rates dropped significantly in mid-December, real estate market recovery takes time as buyers react to the rate decrease and complete various procedures in the home-buying process, such as mortgage approval, appraisal, and transfer of ownership.
The report also revealed that the total inventory of homes for sale in November was 1.13 million units, a 0.9% increase from the same period last year. Homes listed for sale remained on the market for an average of 25 days, a slight increase from the previous month, while in November of the previous year, homes stayed on the market for only 24 days. This suggests that market supply remains limited, and reselling inventory continues to be a challenge.
Regionally, existing home sales varied across the country. The Southern region experienced the highest sales increase at 4.7%, with a median home price of $351,500. Additionally, the report noted that all-cash buyers accounted for 27% of sales, individual investors or second-home buyers made up 18%, and approximately 31% of homes were sold to first-time buyers.
Despite the growth in existing home sales in November, the real estate market still faces challenges. Firstly, although interest rates have declined, they remain relatively high, causing existing homeowners to be reluctant to give up low-rate mortgages to purchase new homes, contributing to a shortage of reselling inventory. Secondly, home prices continue to rise, and only a significant increase in supply can curb the upward trend in prices.
