Existing-home sales slip in November

Existing-home sales took a step back in November following a five-month streak of month-over-month gains.

Total existing-home sales fell 2.5% in November to a seasonally-adjusted annual rate of 6.69 million, the National Association of Realtors (NAR) reported. 

However, sales in total rose 25.8% year-over-year compared to a rate of 5.32 million in November 2019. Sales include completed transactions of single-family homes, townhomes, condominiums and co-ops,

Single-family home sales fell 2.4% to a seasonally-adjusted annual rate of 5.98 million in November from 6.13 million in October, and up 25.6% from one year ago.

“Home sales in November took a marginal step back, but sales for all of 2020 are already on pace to surpass last year’s levels,” said Lawrence Yun, NAR’s chief economist. “Given the COVID-19 pandemic, it’s amazing that the housing sector is outperforming expectations.”

Yun notes that job recoveries have stalled in the past few months, and fast-rising coronavirus cases along with stricter lockdowns have weakened consumer confidence.

“Circumstances are far from being back to the pre-pandemic normal,” he said. “However, the latest stimulus package and with the vaccine distribution underway, and a very strong demand for homeownership still prevalent, robust growth is forthcoming for 2021.”  

Total housing inventory at the end of November totaled 1.28 million units, down 9.9% from October and down 22% from one year ago (1.64 million). Unsold inventory sits at an all-time low 2.3-month supply at the current sales pace, down from 2.5 months in October and down from the 3.7-month figure recorded in November 2019.

Properties remained on the market for about 21 days in November, seasonally even with October and down from 38 days in November 2019. The Nar reported that 73% percent of homes sold in November 2020 were on the market for less than a month.

The median existing-home price for all housing types in November was $310,800, up 14.6% from November 2019 ($271,300), as prices increased in every region. November’s national price increase marks 105 straight months of year-over-year gains.

“The positive momentum that home sellers are seeing will carry on well into the new year,” Yun predicted, citing low mortgage rates and remote-work flexibilities. Looking ahead, the NAR has forecast the annual median home price to rise by 8%.

“Housing affordability, which had greatly benefitted from falling mortgage rates, are now being challenged due to record-high home prices,” Yun said. “That could place strain on some potential consumers, particularly first-time buyers.”

Here’s how existing-home sales performed down by region:

• Existing-home sales in the Northeast dropped 2.2% in November, recording an annual rate of 880,000, a 25.7% increase from a year ago. The median price in the Northeast was $354,100, up 17.4% from November 2019.
• Existing-home sales fell 2.5% in the Midwest to an annual rate of 1,590,000 in November, but up 24.2% from a year ago. The median price in the Midwest was $239,100, a 14.6% increase from November 2019.
• Existing-home sales in the South decreased 3.8% to an annual rate of 2.82 million in November, up 25.9% from the same time one year ago. The median price in the South was $270,000, a 15.0% increase from a year ago.
• Existing-home sales in the West were unchanged from last month, recording an annual rate of 1,400,000 in November, a 27.3% increase from a year ago. The median price in the West was $467,600, up 13.8% from November 2019.

The NAR’s complete existing-home sales report for November 2020 is available here.