For the tenth consecutive month, existing-home sales have dropped according to the National Association of Realtors. The data for Existing-Home Sales for November was released at the end of December. December’s report will be released at the end of January.
All four regions in the U.S. saw month-over-month decreases. The four regions also recorded year-over-year declines in transactions. Single family homes, townhomes, condominiums and co-ops saw a 7.7% sip in completed homes sales from October to a seasonally adjusted annual rate of 4.09 million in November. Year-over-year sales dropped by 35.4%. Compared to November of 2021, that is a decrease of 6.33 million.
“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. Plus, available housing inventory remains near historic lows.”
The total inventory of houses registered at the end of November was 1.14 million units. This is down 6.6% from the month prior but up 2.7% from a year ago (1.11 million). There is a 3.3-month supply of unsold inventory at the current pace of sales. October saw an identical inventory however it’s up from the 2.1 months of inventory from November 2021.
Yun says affordability in 2023 will continue to be a challenge, but there will be less competition for homebuyers as more properties come onto the market.
“What happened in 2020, 2021, multiple offers, situations like that will not repeat,” Yun said.
In the Charlotte area, there is still a high demand for housing but not enough of it.
“Housing stock is low, basically no matter what, we’re not going to change the housing stock shortage for several years,” John Connaughton, professor of financial economics at UNC Charlotte, said. “So, that will keep pressure on prices of single-family homes.”
Realtor.com anticipates a slight decline in homes sales this year by 0.3% however home prices are forecast to increase 5.5%
Meanwhile, the median existing-home price for all housing types across the nation in November was $370,700. This is an increase of 3.5% from November of last year and marks 129 straight months of year-over-year increases. It’s a record for the longest-running streak.
The 30-year fixed-rate mortgage, according to Freddie Mac, averaged 6.31% as of mid-December. That’s down from 6.33% the week prior, however it is up from 3.12% one year ago.
“The market may be thawing since mortgage rates have fallen for five straight weeks,” Yun added. “The average monthly mortgage payment is now almost $200 less than it was several weeks ago when interest rates reached their peak for this year.”
Yun believes this year won’t be a buyer’s or seller’s market as it will be more balanced.