Existing home sales rose in November. The National Association of Realtors chief economist, Lawrence Yun, eyes a “marked turn”.
The National Association of Realtors® NAR® reports Existing-Home Sales Expanded 0.8% in November, Ending Five-Month Slide.
- Existing-home sales edged higher by 0.8% in November to a seasonally adjusted annual rate of 3.82 million, finishing a five-month drop. Sales retreated 7.3% from one year ago.
- The median existing-home sales price rose 4.0% from November 2022 to $387,600 – the fifth consecutive month of year-over-year price increases.
- The inventory of unsold existing homes slid 1.7% from the previous month to 1.13 million at the end of November, or the equivalent of 3.5 months’ supply at the current monthly sales pace.
- All-cash sales accounted for 27% of transactions in November, down from 29% in October but up from 26% in November 2022.
- Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in November, up from 15% in October and 14% one year ago.
- “The latest weakness in existing home sales still reflects the buyer bidding process in most of October when mortgage rates were at a two-decade high before the actual closings in November,” said NAR Chief Economist Lawrence Yun. “A marked turn can be expected as mortgage rates have plunged in recent weeks.“
- “Home prices keep marching higher,” Yun added. “Only a dramatic rise in supply will dampen price appreciation.”
Existing-Home Sales Percent Change From Last Month
Existing-Home Sales Percent Year Ago
The dramatic improvement is due to a slight rise coupled with very easy year-over-year numbers to beat from November of 2022.
Transactions are down over 40 percent from January of 2022, the same as last month.
Existing-Home Sales Supply
For all the moaning about supply, it is nearly double what it was ten months ago. Of course, transactions have plunged, boosting supply.
Yun Expects Marked Turn
NAR cheerleader Laurence Yun expects a “marked turn” as mortgage rates drop.
Mortgage rates are down from a peak of 7.9 percent to 6.65 percent. This may entice some buyers, but for how long?
Home prices are still going up. Yun says ““Only a dramatic rise in supply will dampen price appreciation.”
Housing Starts Jump 14.8 Percent but Permits Sink 2.5 Percent
Housing starts jumped 14.8 percent in November led by single family construction, up 18 percent. Revisions were negative.
Yesterday, I noted Housing Starts Jump 14.8 Percent but Permits Sink 2.5 Percent
Via incentives, mortgage write downs, and limited availability of existing homes to buy, the builders are holding up much better than real estate agents.
Major Boom-Bust Swings
The major boom-bust cycles are largely a result of Fed policy. The results you see from 2020-present are almost entirely due to Fed QE then QT policy.
How the Fed Destroyed the Housing Market and Created Inflation in Pictures
For discussion of the Fed’s role in this mess, please see How the Fed Destroyed the Housing Market and Created Inflation in Pictures
Housing starts are a bit less than they were in 1959.
Seldom a Worse Time to Buy
Existing home prices hit a new record high in September. Even with the decline in mortgage rates, there has seldom been a worse time to buy.
Case-Shiller is a far better measure of home prices than median or average prices which do not factor in the number of rooms, location, lot size, or amenities. However, the data lags by 4 months or so.
For discussion, please see Home Prices Hit a New Record High According to Case-Shiller, Thank the Fed
At one time, my wife and I bought a Mountain home for less than $150,000. We doubled our money in 15 years….part of that not-so-spectacular return was that the 2007-9 RE crash caused the house to sit two years while we watched $300K in value EVAPORATE. I did the math on our gains over that 15 years and we lived for FREE for that 15 years plus a net gain, after I calculated the net-taxed cash flow (less deprecation as I had a home office) plus all of the expenses of a mountain home (wood burning, driveway maint, tractor maint, gutter replacement, septic failures, water pump failure, etc etc) and our net cash flow after all taxes/expenses/deprec/Maint was $24,000 and change. That was it.
Everyone should track every penny of your home expenses, calculate the Tax savings, the Prop tax/exp/deprec/ etc and see what your REAL gains are after doing the math and to me I see a home as a free way to rent a place. I “rent” my RE. Now, we live full time in an RV and travel full time (Prevost Bus with a tow car) and we keep our left-over crap in a big dual axle Cargo trailer, left on the folks ranch) and our cost of living is easily under $4,000 AVERAGE a month and that expense load include having a rental in Portugal for six months every winter (We have a rental in the Algarve region of that lovely country). So, our RV life affords us our lifestyle due to it being cheap to live and we are owners of a Co-Op RV space that only costs us $600 a month, all in including Utilities). That is a summer spot in Oregon.
RE prices went up 60% to 400% in 2 years due to FED and free government money programs. No young person can afford the “market prices” today at any interest rate without cash from boomer parents. What a complete fraud and mess has been made of RE. ONLY a deep crash and cleansing solves this
As a matter of fact, new homebuilders reported first time homebuyers were 50% of their sales
they didn’t mention the $10,000+ mortgage buy downs builders offered
If anyone gets off on high real estate price schadenfreude and unaffordability of homes for the masses, the Canada subreddit is the best site for that particular genre of porn. It’s already unaffordable there and Blackface Justin keeps bringing in 500,000 to a million new immigrants in each year in a country with fewer than 40 million.
Are prices up? That’s all that matters.
of course PRICES are up – value = SAME
just needing more of those pesky worthless fiat $dollars to buy same VALUE
Recently took trip to vacay land thinking I might consider something
left with firm notion that I’ll continue to 5th wheel in summers at fraction of cost
now these same mountain properties are finding out INSURERS don’t want them and are either cancelling entirely or raising prices 100%
“Mortgage rates are down from a peak of 7.9 percent to 6.65 percent. This may entice some buyers, but for how long?”
It’s all relative. 7.9% was crazy relative to 3.5%; and the market froze. 6.65 is still crazy high but looks pretty good relative to 7.9%; and the market is starting to thaw.
Even if borrowers are willing to accept a 6.65 rate they may not qualify for the mortgage. There’s still a huge difference in payments from 3% to 6.65% and homeowners insurance is through the roof. We’re buying a new construction home and the realtor advised us the minimum is $150 month.
now consider 1-2% buydown concession sellers are offering(builders started it)
now you’re looking at 5% OR LESS – how much more of mortgage can they now afford
I own properties I bought in the early 2000’s with 6.5% mortgages on them. I was ecstatic at the time to get such low rates. 6-7% is normal if you look at long term charts. Everyone got spoiled with all the 3% money the last few years.
True…this was purposeful to paper over the fragility of the economy. R.E. also creates the “illusion” of wealth. Wealth is only wealth when it is truly liquid enough to be put into Bonds or re-deployed into income producing instruments, such as a new business that creates true cash flow and taxes reduced using depreciation tactics and other ways to avoid paying taxes on that cash flow. NO ONE should buy R.E. as a way to produce wealth: the primary reason is to have a safe and cool/warm place to rest yourself from a real job. IF the house appreciates and you are lucky enough to take profits later, then that nest egg can be used to cash-buy a retirement place to reduce expenses and relax for once.
The surge in home prices will obviously result in higher rents – higher inflation – in other words stagflation in due course.
“HOUSING IS THE BUSINESS CYCLE” Edward E. Leamer
“A bill introduced in the House and Senate would prevent hedge funds from owning single-family houses in the United States.” But that legislation will have little impact on new construction as Treasury issuance keeps mortgage rates higher for longer.
Not looking forward to a “command economy”.
Homeowners Insurance, cost of maintenance and Property Taxes are going through the roof. If your landlord had an adjustable rate mortgage that re-priced in the last two years he will have no choice but to increase your rent.
just the property taxes and 30% increase in insurance will make me raise rents
my properties are F&C, but cost of maintaining is reaching stupid levels
thanks bidenomics
fiat $dollar now 30% worth less than in 2020
The average house sold was $387.6K one third of C/S positively biased top ten.
Transactions are down over 40% from Jan of 2022. Lawrence Yum, dead cat bounce, on the cusp of recession. Teaser rates and give away boosted sales.
Housing is going to go way up, there is massive demand, mainly from Millennials and not enough SFHs being built.
so sorry I’m not selling – got my 3.35% mortgage
and rest of my homes are investments(income producing)
but if you want I’ll sell at MY PRICE – so sorry no longer interested in low ball offers
new home for rent – top $$ and I’ll get due to low inventory and great neighborhood
making my double digit returns ole fashion way – I earned it