Soaring home prices, persistently high mortgage rates and reduced supply are all weighing on potential homebuyers.
According to the National Association of Realtors, existing home sales in November rose only 0.5% from October and were down 1% compared to November 2024. The annual sales volume was 4.13 million units.
The tally is done on a contract-based basis, so it reflects deals likely signed in September and October, when mortgage rates initially fell slightly but have since remained in a narrow range.
After increasing through most of this year, supply decreased in November. According to the association, the number of homes sold as of the end of the month was 1.43 million, a 5.9% decrease compared to October, but a 7.5% increase compared to the same month last year. At the current sales pace, this equates to 4.2 months’ supply. A six-month supply is considered balanced between buyers and sellers.
“Inventory growth is beginning to slow,” Lawrence Yun, chief economist at The Realtors, said in a release. “With distressed real estate sales at historic lows and home equity at record highs, homeowners are in no rush to list their properties over the winter.”
Sellers who were on the market also began delisting their properties at a higher rate than usual. Sellers often take unsold homes off the market as winter approaches, and this year the trend was even stronger.
And that continues to put pressure on housing prices. The median price of homes sold in November was $409,200, an increase of 1.2% from November 2024 and the highest price ever for November. Real estate agents use the median price, so they can be biased toward which end of the market is selling the most. Now the high end is much better than the low end. Sales of homes priced between $100,000 and $250,000 fell nearly 8% from a year earlier, while sales of homes priced over $1 million increased 1.4%.
“Housing affordability is improving as wage growth outpaces home price increases. Still, future affordability could be hampered if housing supply cannot keep up with demand,” Yun said.
Homes are on the market for 36 days, compared to 32 days last November. First-time home buyers account for 30% of sales, unchanged from a year ago, but historically around 40%. Investors returned to the market and accounted for 18% of trades, up from 13% in November 2024.
