Homes sold in November at the fastest pace in 10 months


US home sales increased in November, as low mortgage interest rates and a strong labor market continued to stimulate demand.

Existing home sales rose 1.9% in November from the previous month to a seasonally adjusted annual rate of 6.46 million, the highest pace since January, the National Association of Realtors said on Wednesday. . November sales fell 2.0% from a year earlier.

Existing home sales are on track for their strongest year since 2006, and sales in the first 11 months of the year were up 10% from the previous year, NAR said. Low interest rates, combined with higher household savings and a desire for more space to work from home, prompted buyers to enter the market. A surge of millennials aging in their first few years of home buying has also fueled demand.

At the same time, the supply of homes for sale fell to an all-time high at the start of the year and has remained well below normal throughout the year.

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As buyers compete for a limited number of homes on the market, home prices have skyrocketed. The median price of existing homes rose 13.9% in November from a year earlier, NAR said, to $ 353,900.

“Determined buyers were able to secure homes before mortgage rates rose further in the coming months,” said Lawrence Yun, chief economist of NAR. Sales of existing homes could slow next year if mortgage rates rise, he said.

Economists polled by the Wall Street Journal expected a 2.5% monthly increase in used home sales, which make up the bulk of the housing market.

The holiday season and cold weather in parts of the country typically reduce home sales towards the end of the year. But activity hasn’t slowed down much in recent weeks. Buyers may have been in a rush to buy before home prices rose further or interest rates rose, said Doug Duncan, chief economist at Fannie Mae.

Home sales in general have been stronger than expected,” he said.

Mortgage interest rates rose slightly from the summer, but remain well below pre-pandemic levels. The average rate on a 30-year fixed-rate mortgage was 3.12% as of Dec. 16, according to mortgage finance giant Freddie Mac.

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Federal Reserve officials have indicated they may hike rates as early as spring 2022.

Buyers frustrated with the market this year and who have chosen not to buy could return in 2022, according to realtors, which will keep demand strong over the coming year.

The market remains fast and many homes are selling above the listing price. The typical home sold in November was on the market for 18 days, unchanged from the previous month, NAR said.

At the end of November, 1.11 million homes were for sale, down 9.8% from October and 13.3% from November 2020. At the current rate of sales, the housing supply on the market was 2.1 months at the end of November.

On a seasonally adjusted basis, the number of homes for sale in November fell to an all-time high, according to real estate broker Redfin. Corp.

“If you are half interested in [a home on the market], you’ve got to have your trigger finger ready to go, ”said Robbie Breaux, an agent in Lafayette, Louisiana. “You have 50 people looking at the same three houses as everyone else.

James Matias and Jaime Vargas Cruz bought a new home near Buffalo, NY, in November.


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Dana david

Jaime Vargas Cruz and James Matias have decided to sell their three-bedroom home in Buffalo, NY, and buy a larger one after Mr. Vargas Cruz got a new job this summer in customer service. They listed their house in July and signed a contract within a week.

With a budget of $ 250,000, they bought homes that were rated below $ 220,000, so they could bid above the listing price. “We knew that these [listed] at $ 250,000, it would cost $ 280,000 and $ 290,000, ”said Vargas Cruz.

They got their fifth offer accepted for around $ 260,000 and moved in last month.

“We are very, very happy,” said Vargas Cruz. “This is definitely the house we are looking to grow up in. “

The market is particularly competitive at lower prices, where buyers with limited liquidity may be outbid by investors or cash buyers. About 24% of existing home sales in November were bought in cash, up from 20% a year earlier, NAR said.

The market share of first-time buyers fell to 26%, the lowest level since January 2014 and down from 32% a year earlier.

Existing home sales rose the most on a month-over-month basis in the South, up 2.9%, and in the West, up 2.3%.

Construction activity increased due to strong demand. Housing starts, a measure of US home construction, rose 11.8% in November from October, the Commerce Department said last week. Residential permits, which can be an indicator for future home construction, rose 3.6%.

Corp News,

owner of The Journal, also operates Realtor.com under license from NAR.

Write to Nicole Friedman at nicole.friedman@wsj.com

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