Home sales in November exceeded predictions, fueled by decreasing mortgage costs.

• In November, there was a 4.8% increase in sales of previously owned homes compared to October, as reported by the National Association of Realtors.
• In three years, the largest annual increase in sales was recorded in November 2023, with a 6.1% rise compared to the previous month.

In November, the National Association of Realtors reported a 4.8% increase in sales of previously owned homes compared to October. This brought the seasonally adjusted, annualized rate to 4.15 million units.

The third-highest pace of the year was achieved in sales, which increased by 6.1% compared to November 2023. This represents the largest annual gain in three years.

In September, mortgage rates reached an 18-month low. However, in October, they increased.

"Lawrence Yun, the chief economist for the NAR, stated that home sales momentum is increasing. This is due to more buyers entering the market, the economy adding jobs, an increase in housing inventory compared to the previous year, and consumers becoming accustomed to mortgage rates ranging from 6% to 7%."

The number of homes for sale at the end of October was 1.33 million units, which is 17.7% higher than the same time last year. With the current sales pace, this represents a 3.8-month supply. A balanced market between buyers and sellers is achieved with a 6-month supply.

The tight supply continued to put pressure on prices, with the median price in November reaching $406,100, up 4.7% year-over-year. Prices were also up 4% annually in October.

In the Northeast and Midwest, the strongest price gains were recorded at 9.9% and 7.3% respectively. Approximately 18% of homes were sold above their list price.

In November, first-time homebuyers made up 30% of sales, up from 27% in October but down slightly from a year ago. Cash remained the preferred option at 25% of sales. However, investors saw a decrease in their share of sales to 13%, down from 18% in November of the previous year.

Is it possible that investors or more analytical individuals believe that home prices have reached their peak, or is it possible that rents are no longer increasing for another reason? Yun questioned.

Sales of homes priced above $1 million experienced a 24.5% increase from the previous year, while sales of homes priced below $100,000 saw a 24.1% decline.

The average rate on the 30-year fixed mortgage increased by 21 basis points on Wednesday, following the Federal Reserve meeting, and it is predicted that there will be fewer rate cuts next year.