Existing-home sales decreased in November, breaking a five-month streak of month-over-month gains, according to the National Association of Realtors (NAR). However, home sales are still up significantly year over year.
Total existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops—decreased 2.5% from October to a seasonally adjusted rate of 6.69 million in November. Sales in total are up 25.8% from a 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 NAR chief economist Lawrence Yun. “Given the COVID-19 pandemic, it’s amazing that the housing sector is outperforming expectation.”
Yun noted that escalating coronavirus cases and stalled job recovery in recent months 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.”
The median existing-home price for all housing types was $310,800 in November, up 14.6% from the prior year. This marks 105 straight months of year-over-year gains.
According to the NAR, total housing inventory at the end of November totaled 1.28 million units, down 9.9% from October and down 22% year over year. Unsold inventory is at an all-time low of 2.3 months of supply at the current sales pace. This is down from 2.5 months in October and 3.7 months in November 2019.
Properties typically were on the market for 21 days in November, which is seasonally even with October and down from 38 days in November 2019. Almost three-quarters of homes, 73%, sold in November were on the market for less than a month.
Yun said he believes the positive momentum will continue into the new year, with low mortgage rates and work-from-home flexibilities. During the NAR Real Estate Forecast Summit earlier in December, industry insiders said they believe mortgage rates will hover around 3% in 2021 as well as said they expect the annual median home price to increase 8%.
“Housing affordability, which had greatly benefited from falling mortgage rates, are now being challenged due to record-high home prices,” added Yun. “That could place strain on some potential consumers, particularly first-time buyers.”
In November, all major regions either took a step back or held steady month over month. However, year over year, they also all saw significant growth and experienced median home price increases at double-digit rates.
Month over month, existing-home sales decreased 2.2% in the Northeast, 2.5% in the Midwest, and 3.8% in the South in November. Existing-home sales were unchanged in the West from the prior month.