The Commerce Department reported This Week in Real Estate that new home sales exceeded expectations in November, rising 5.8% over prior month, while existing home sales slid 7.7% from prior month. Total housing inventory was down 6.6% at the end of November compared to October while median existing home sale prices rose in all regions of the U.S., up 3.5% year-over-year. According to Freddie Mac, the average 30-year fixed mortgage rate declined for the sixth consecutive week, to the lowest level since mid-September. Below are a few newsworthy events from the third week of December that influence our business:
Existing-Home Sales Dipped 7.7% in November. Existing-home sales declined for the tenth month in a row in November, according to the National Association of Realtors. Total existing-home sales waned 7.7% from October to a seasonally adjusted annual rate of 4.09 million in November. Year-over-year, sales dwindled by 35.4% (down from 6.33 million in November 2021). “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. Total housing inventory registered at the end of November was 1.14 million units, which was down 6.6% from October, but up 2.7% from one year ago (1.11 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, which was identical to October, but up from 2.1 months in November 2021. The median existing home price for all housing types in November was $370,700, an increase of 3.5% from November 2021 ($358,200), as prices rose in all regions. This marks 129 consecutive months of year-over-year increases, the longest-running streak on record. Properties typically remained on the market for 24 days in November, up from 21 days in October and 18 days in November 2021. Sixty-one percent of homes sold in November 2022 were on the market for less than a month.
Mortgage Rates Give Homebuyers Some Holiday Relief, Falling for Sixth Week in a Row. Mortgage rates continued to inch downwards, providing some relief to prospective homeowners. The 30-year fixed-rate mortgage averaged 6.27% as of December 22, according to data released by Freddie Mac on Thursday. Rates have dropped for the sixth week in a row. Rates were last at this level in mid-September. “Rates have declined significantly over the past six weeks, which is helpful for potential homebuyers,” said Sam Khater, chief economist at Freddie Mac. But “new data indicates that homeowners are hesitant to list their homes,” he added. “Many of those homeowners are carefully weighing their options as more than two-thirds of current homeowners have a fixed mortgage rate of below four percent,” Khater explained.
U.S. New Home Sales Rose in November by 5.8%. U.S. new home sales rose 5.8% to a seasonally adjusted rate of 640,000 in November, from a revised 605,000 in the prior month, the Commerce Department reported Friday. The November sales figure beat analyst estimates. The sales of new homes are below a peak of 1.04 million in August 2020. Year-over-year, new home sales are still down by 15.3%. New home sales jumped in November, likely as buyers wanted to take advantage of incentives that builders are offering.
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