After increasing for five straight months, existing-home sales fell in November, dropping 2.5% compared with October to a seasonally adjusted annual rate of 6.69 million, according to the National Association of Realtors (NAR).
However, existing-home sales were up 25.8% compared with November 2019.
Regionally, and on a month-over-month basis, existing-home sales were down 2.2% in the Northeast, 2.5% in the Midwest and 3.8% in the South. Sales were flat in the West.
Year-over-year, home sales were up by double digits in all four regions.
“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,” says Lawrence Yun, chief economist for NAR, in a statement. “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,” Yun says. “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 in November was $310,800, up 14.6% compared with $271,300 in November 2019.
Total housing inventory at the end of November totaled 1.28 million units, down 9.9% compared with October and down 22% from one year ago.
That’s about a 2.3-month supply and an all-time low.
Properties typically remained on the market for 21 days in November, seasonally even with October and down from 38 days in November 2019.
Seventy-three percent of homes sold in November 2020 were on the market for less than a month.
“The positive momentum that home sellers are seeing will carry on well into the new year,” Yun says, citing low mortgage rates and remote-work flexibilities.
Yun’s projections of a continued housing market rebound were the consensus among economic and housing experts during NAR’s Real Estate Forecast Summit, held earlier this month.
Industry insiders in attendance agreed that mortgage rates will hover around 3% in the coming year, and say they expect an annual median home price increase of 8.0%.
“Housing affordability, which had greatly benefitted from falling mortgage rates, are now being challenged due to record-high home prices,” Yun says. “That could place strain on some potential consumers, particularly first-time buyers.”