November's existing-home sales rate set the fastest pace since March, climbing 4.8% month over month to a seasonally adjusted annual rate of 4.15 million. What's more, November's sales increase of 6.1% year over year was the largest gain recorded since June 2021. According to the National Association of Realtors (NAR), three sales regions across the country benefited from the sales momentum, while sales remained steady in the West.

Rising Equity Fuels Homeowner Moves
Median existing-home prices climbed for the 17th consecutive month, increasing 4.7% year over year. Every sales region across the country reported price gains, suggesting housing demand is high. Lawrence Yun, chief economist for the NAR, believes homeowners are leveraging their financial positions: "Existing homeowners are capitalizing on the $15 trillion rise in housing equity over the past four years to look for homes better suited to their changing life circumstances." This trend of housing equity driving market activity is expected to continue into the coming months.

Balancing Supply and Demand
November's sales may have surged, but market conditions are still being dictated by inventory levels. Total housing inventory fell 2.9% month over month in November to 1.33 million units, or a 3.8-month supply at the current sales pace. Although this was lower than October's 4.2-month supply, it was up 17.7% from the same time last year, giving buyers more options and helping to cool competitiveness in the market. The average property remained available for sale for 32 days in November, up from 29 days a month ago but down from the 25-day average a year ago. These numbers indicate that the market is becoming more balanced between supply and demand, which should benefit future buyers and sellers.

First-Time Buyers and Investor Activity
First-time buyers accounted for 30% of all purchases in November, up from 27% a month ago but down from 31% a year ago. According to the NAR "2024 Profile of Home Buyers and Sellers," first-time buyers represented 24% of the buying public, the lowest share on record. All-cash sales, which are typically made by investors, represented 25% of all transactions, down from 27% in both October 2024 and November 2023. Individual investors accounted for 13% of all purchases in November, down from 17% a month earlier. In a sign of the housing market's resilience, distressed sales (including foreclosures and short sales) were a small fraction of the total market, accounting for just 2% of all transactions.

Buyers Accepting Higher Mortgage Rates
Yun believes that home sales growth will continue to build: "More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%." The 30-year fixed-rate mortgage averaged 6.6% in mid-December, down slightly from 6.69% a week earlier and 6.95% a year earlier. Although rates are higher than those posted in the early 2020s, they are starting to stabilize, reassuring buyers that now is the right time to reenter the market and finally purchase a home that fits both their budgets and long-term goals.

Regional Sales Breakdown

Northeast: Existing-home sales annual rate of 510,000; an increase of 8.5% from October 2024 and 6.3% from November 2023. The median sales price of $475,500 represented a 9.9% increase from November 2023.

Midwest: Existing-home sales annual rate of 1 million; an increase of 5.3% from both October 2024 and November 2023. The median sales price of $302,000 represented a 7.3% increase from November 2023.

South: Existing-home sales annual rate of 1.87 million; an increase of 5.6% from October 2024 and 3.3% from November 2023. The median sales price of $361,300 represented a 2.8% increase from November 2023.

West: Existing-home sales annual rate of 770,000; unchanged from October 2024 but an increase of 14.9% from November 2023. The median sales price of $628,200 represented a 4% increase from November 2023.