Prices still at record levels even as existing-home sales tick up

The housing market suffered from sluggish sales again in November 2024, but sales volumes are trending up. And home prices remain near record highs, a new report by the National Association of Realtors (NAR) shows.

The median home-sale price marked the highest median on record for the month of November, NAR Chief Economist Lawrence Yun said, and was only slightly off from June’s all-time high. Meanwhile, sales of existing homes rose 4.8 percent from a year ago.

“Home-sales momentum is building,” Yun said in a statement. “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 percent and 7 percent.”

High mortgage rates had contributed to the slow sales figures, but that picture has been shifting. Even before the Federal Reserve announced a half-point rate cut on Sept. 18, mortgage rates had gone all the way from 8.01 percent in Oct. 2023 to 6.20 percent as of Sept. 18, according to Bankrate’s most recent survey of large lenders. However, mortgage rates have risen, climbing to 6.91 percent as of Dec. 18.

With home prices historically high, affordability challenges remain daunting for homebuyers. Lower mortgage rates would relieve some of that pain — but they also could lure more buyers into the market, and therefore cause upward pressure on prices.

“The fate of the housing market in the coming months will be dictated in part by the direction of mortgage rates, as well as the health of the broader economy,” says Mark Hamrick, Bankrate’s senior economic analyst. “The market could benefit from a combination of tailwinds, if they were to develop and are sustained.”

The sharp rise in mortgage rates since the pandemic has kept many homeowners from selling. However, Yun expects that “lock-in effect” to fade with the passage of time and an eventual decline in rates.

Existing-home sales rise but remain slow

The count of existing-home sales includes all completed resales, including single-family houses, condos, townhouses and co-ops. According to NAR, the number of sales nationally increased from the previous month to an annual pace of 4.15 million transactions in November.

In November, existing-home sales in the Northeast jumped 8.5 percent from October to an annual rate of 510,000, up 6.3 percent from November of last year. In the Midwest, sales grew 5.3 percent in November to an annual rate of 1 million, up 5.3 percent. Sales in the South rose 5.6 percent from October to an annual rate of 1.87 million, up 3.3 percent from one year before. And in the West, the sales percentage was flat month-over-month at an annual rate of 770,000, up 14.9 percent from a year ago.

Days on market

Properties typically remained on the market for 32 days in November, up from 29 days in October and 25 days in November 2023. Selling times are a crucial measure at any time of year, but especially during the peak spring and summer selling seasons.

Home prices hit new November record

The nationwide median sale price for existing homes in November clocked in at $406,100. That’s below June’s all-time high of $426,900, mostly due to seasonality, but it’s still an increase of 4.7 percent from last year and the highest November median on record. In fact, this month’s jump marks 17 consecutive months of year-over-year price increases.

Home prices were up year-over-year in all four regions. The median price in the Northeast was $475,500, up 9.9 percent from last year. In the Midwest it was $302,000, up 7.3 percent, and in the South it was $361,300, up 2.8 percent from one year earlier. The median price in the West remains the highest by far at $628,200, up 4.0 percent from November 2023.

First-time homebuyers made up 30 percent of sales in November, an improvement over the all-time low of 26 percent in August and September. Cash sales accounted for 25 percent of all transactions in November, down from 27 percent one month and one year earlier.

Housing inventory on the rise

The supply of homes for sale has been inching higher after hitting record lows during the pandemic. Total housing inventory at the end of November was 1.33 million units, down 2.9 percent from October but up a healthy 17.7 percent from one year ago (1.13 million). Unsold inventory sits at a 3.8-month supply at the current sales pace, down from 4.2 months in October but up from 3.5 months in November 2023.

“The extreme tightness in the invetory is over,” Yun told reporters Dec. 19.