Home sales rose in November, but are down from last year

Core Insights - Sales of previously occupied U.S. homes increased by 0.5% in November compared to October, reaching a seasonally adjusted annual rate of 4.13 million units, but showed a decline of 1% year-over-year for the first time since May [1][2] - The national median sales price rose by 1.2% in November from a year earlier, reaching an all-time high of $409,200, marking 29 consecutive months of annual price increases [4] - A shortage of homes for sale, particularly in the affordable segment, continues to impact first-time homebuyers, who accounted for only 30% of sales last month, down from a historical average of 40% [7] Sales Performance - Existing home sales are down 0.5% year-to-date compared to the same period last year, with a forecast suggesting that 2025 may see a slight decline unless December figures improve [2][3] - Sales have remained around a 4-million annual pace since 2023, significantly below the historical norm of 5.2 million [5] Mortgage Rates and Affordability - The average rate on a 30-year mortgage fell to 6.17% at the end of October, the lowest in over a year, contributing to a slight boost in sales [5] - Affordability remains a significant challenge for many potential buyers, particularly first-time buyers lacking equity from previous homes [6] Inventory and Market Conditions - There were 1.43 million unsold homes at the end of November, a decrease of 5.9% from October but an increase of 7.5% from the previous year, indicating a tight inventory situation [9] - The current inventory represents a 4.2-month supply at the current sales pace, below the balanced market range of 5 to 6 months [9] Future Outlook - The chief economist of NAR forecasts a 14% increase in existing home sales for next year, which is more optimistic than other forecasts ranging from 1.7% to 9% [10]