Partly reflecting the recent surge in mortgage rates, the National Association of Realtors released a report on Wednesday showing a continued slump in U.S. existing home sales in the month of November.
NAR said existing home sales dove by 7.7 percent to an annual rate of 4.09 million in November after plunging by 5.9 percent to a rate of 4.43 million in October. Economists had expected existing home sales to tumble by 5.2 percent to a rate of 4.20 million.
Existing home sales decreased for the tenth consecutive month and are down by 35.4 percent compared to the same month a year ago.
“In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020,” said NAR Chief Economist Lawrence Yun.
“The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes,” he added. “Plus, available housing inventory remains near historic lows.”
The report said housing inventory at the end of November totaled 1.14 million units, down 6.6 percent from 1.22 million units in October but up 2.7 percent from 1.11 million units a year ago.
The unsold inventory in November represents 3.3 months of supply at the current sales pace, unchanged from October but up from 2.1 months in November 2021.
The median existing home price was $370,700 in November, down 2.1 percent from $378,800 in October but up 3.5 percent from $358,200 a year ago.
NAR also said single-family home sales plunged by 7.6 percent to an annual rate of 3.65 million in November, while existing condominium and co-op sales plummeted by 8.3 percent to an annual rate of 440,000.
On Friday, the Commerce Department is scheduled to release a separate report on new home sales in the month of November.
Economists expect new home sales to tumble by 3.8 percent to an annual rate of 608,000 in November after spiking by 7.5 percent to an annual rate of 632,000 in October.
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