Existing home sales fell 1.7% from October in November to a rate of 5.35 million. Sales are still up by 2.7% when compared to November 2018, according to the National Association of Realtors.
Lawrence Yun, NAR’s Chief Economist, said the decline in sales for the month is not worrisome.
“Sales will be choppy when inventory levels are low, but the economy is otherwise performing very well with more than 2 million job gains in the past year,” Yun said.
The median existing-home price for all housing types in November rose 5% to $271,300. November marks 93 straight months of year-over-year gains.
Inventory at the end of November was 1.64 million units—down 7.3% from October and 5.7% from November 2018. Unsold inventory is currently at a 3.7-month supply, which is down from 3.9 months in October and 4 months last November. The volume of unsold inventory has declined for five consecutive months.
"This was a surprising drop in home resales that few people foresaw. After all, mortgage rates were about one percentage point lower in November than they were the previous November, which made homes more affordable than they otherwise would be,” said Holden Lewis, Home and Mortgage Expert for NerdWallet. “This unheralded decline in home sales will freshen a debate about the economy's prospects in 2020, and whether consumer confidence is about to head downward.”
Fewer homes were sold below $250,000, with the NAR reporting a 16% decline along with a 4% reduction for homes priced between $100,000 and $250,000.
Redfin also reported Thursday that home prices increased 5.2% annually in November to a median of $311,600 across the more than 200 metros tracked. This was the largest increase since July 2018, when prices increased 5.6%.
“Given that inventory is falling quickly, we’d expect to see even stronger price growth, especially when compared to last year’s soft market,” said Redfin Chief Economist Daryl Fairweather. “The fact that homes are selling faster indicates that there are buyers ready to pull the trigger and take advantage of low-interest rates. If lack of inventory and high demand continues, buyers who take a wait-and-see approach could face less favorable conditions in the spring season like bidding wars and faster price growth.”
For the second month in a row, just one of the 85 largest metros tracked by Redfin saw annual declines in median prices in November: San Jose, California. Home prices in San Jose fell 1.1% and are just up 1.6% above prices last year.
Additionally, Freddie Mac’s Primary Mortgage Market Survey found the average 30-year fixed-rate mortgage was unchanged from the prior week at 3.73%
“The economy continued to pick up momentum with a solid increase in residential construction, improvement in industrial output in our nation’s factories and a rise in job openings,” said Sam Khater, Freddie Mac’s Chief Economist. “While the economy is in a sweet spot, improvements in the housing market