November witnessed an unexpected surge in home sales, as data from the National Association of Realtors revealed a 4.8% increase compared to October. This boost defied rising mortgage rates, which have climbed sharply since hitting an 18-month low in September. The supply of homes at the end of October reached 1.33 million units, marking a significant 17.7% increase from the same time last year.
First-time homebuyers made notable strides in November, accounting for 30% of the month's sales, up from 27% in October. This shift indicates growing accessibility for newcomers to the housing market. Meanwhile, the median home price rose to $406,100, a 4.7% increase from the previous year, reflecting robust demand despite financial headwinds.
November's home sales demonstrated resilience across various price categories, although with contrasting trends. Sales of homes priced over $1 million surged by an impressive 24.5% compared to the same period last year. Conversely, homes priced below $100,000 experienced a significant decline, dropping by 24.1%. This disparity highlights the varying impacts of economic conditions across different market segments.
The Northeast and Midwest regions recorded the strongest price gains, with increases of 9.9% and 7.3%, respectively. Overall, prices were up by 4% annually in October, signaling a consistent upward trajectory despite fluctuating interest rates. Mortgage rates have risen again, with the average rate on a 30-year fixed mortgage surging by 21 basis points last Wednesday.
The current sales pace represents a 3.8-month supply of homes, a figure below the six-month supply level considered balanced between buyers and sellers. The dynamics in November suggest a market leaning towards sellers, as approximately 18% of homes sold above list price.
"Home sales momentum is building," said Lawrence Yun, chief economist for the NAR.
This momentum reflects a broader trend, as November's sales were 6.1% higher than the same month last year—the largest annual gain seen in three years.