US existing home sales experienced a robust increase last month, exceeding expectations and achieving the largest year-over-year gain since June 2021, as shown by data released Thursday by the National Association of Realtors (NAR). Existing home sales rose by 4.8% month-over-month, reaching a seasonally adjusted annual rate of 4.15 million units in November, surpassing the anticipated 3% increase in a survey compiled by Bloomberg.
On a yearly basis, sales surged by 6.1%. "Home sales momentum is building," stated NAR Chief Economist Lawrence Yun. "More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%." Single-family home sales soared to a seasonally adjusted annual rate of 3.76 million units last month, marking a 5% increase from October and a striking 7.4% rise from a year earlier.
Meanwhile, existing condominium and co-op sales came in at 390,000 units, up 2.6% sequentially but down 4.9% from November 2023, according to the NAR. Sales increased across the Northeast, Midwest, and South month-over-month, while remaining flat in the West. On an annual basis, all four regions reported gains, reinforcing the positive sales trend. Despite this encouraging momentum, TD Economics warned that the uptrend in sales may "dissipate" at the beginning of next year, as indicated in a report published Thursday. However, TD Economist Admir Kolaj expressed optimism: "As mortgage rates likely drift lower once again next year—a trend we anticipate will be more pronounced around mid-2025—home sales should resume their upward trajectory.
Still, if the Federal Reserve's revised outlook of only two interest rate cuts next year materializes, the expected improvement will be more moderate than we currently foresee." The median existing-home sale price across all housing types increased by 4.7% year-over-year, reaching $406,100 in November, as reported by NAR.
The average 30-year fixed-rate mortgage stood at 6.6% as of December 12, a decrease from 6.69% a week prior and from 6.95% a year earlier, according to Freddie Mac data referenced by NAR. Inventory of existing homes at the end of last month totaled 1.33 million units, down 2.9% from October and approximately 18% higher than the previous year.
At the current sales rate, unsold inventory equates to a 3.8-month supply, which is down from 4.2 months in October but an increase from 3.5 months in November 2023. On Wednesday, government data indicated a surprising decrease in US housing starts last month, primarily driven by a significant decline in multi-family projects..