U.S. Home Sales Show Signs of Recovery

In a positive turn of events, U.S. home sales saw an increase in November for the first time since May. This could be an early indication of a housing-market recovery, especially as mortgage rates are beginning to fall.

Sales Numbers
According to the National Association of Realtors, sales of previously owned homes rose by 0.8% to an annual rate of 3.82 million in November. These numbers are seasonally adjusted to reflect the sales that would occur over an entire year if the rate remained consistent each month.

This increase in sales surpassed expectations, as analysts forecasted existing-home sales to total 3.76 million for November. However, it’s worth noting that home sales were down by 7.3% compared to November 2022.

Median Home Price
The median price for an existing home in November reached $387,600, marking a 4% increase from the previous year. This is the highest price recorded for the month of November since the National Association of Realtors started tracking the data.

It’s important to highlight that home prices peaked in June 2022 when the median price for a resale home hit $413,800.

Market Trends
Around 19% of properties are currently being sold at or above the list price, showing a healthy demand in the market. Moreover, the total number of homes for sale in November increased by 0.9% compared to the previous year, with 1.13 million units available.

Homes listed for sale spent an average of 25 days on the market, slightly longer compared to the previous month’s average of 24 days.

Regional Insights
Existing home sales varied across different regions of the United States. The South experienced the highest growth with a 4.7% increase in sales. The median price of a home in this region was $351,500.

Buyer Demographics
All-cash buyers accounted for 27% of the sales, and individual investors or second-home buyers made up 18% of the market. Additionally, about 31% of homes were purchased by first-time home buyers.

In conclusion, the recent increase in U.S. home sales in November provides promising signs of a potential housing-market recovery. Aspiring homeowners took advantage of the opportunity to buy despite interest rates remaining high. With falling mortgage rates and a healthy demand in various regions, the real estate market is expected to continue its upward trend.

U.S. Housing Market Shows Signs of Recovery

The U.S. housing market is displaying early signs of recovery as mortgage rates dip below 7% for the first time since August. This decline in rates is likely to attract eager home buyers who have been patiently waiting for an opportunity. Notably, the 30-year rate is at a five-month low, and experts predict that it will continue to fall throughout 2024.

However, despite this positive development, resale inventory remains a challenge. Existing homeowners are hesitant to give up their low-interest rates and purchase another property with higher interest payments. As a result, the availability of homes for sale continues to be limited.

According to Lawrence Yun, Chief Economist at the NAR (National Association of Realtors), the recent increase in home sales in November is not considered significant. Yun attributes this rise to “statistical noise.” Additionally, he cautions that although rates dropped significantly in mid-December, the housing market may not experience a full recovery for another two to three months. Buyers need time to respond to the rate dip and complete the home-buying process, including mortgage approval, appraisal, and closing.

Yun highlights the persistent issue of low inventory throughout the year and asserts that rates need to decrease further to motivate homeowners to sell their properties. On the topic of home prices, he states that they continue to rise steadily. Price appreciation can only be dampened by a substantial increase in supply.

In response to these developments in the housing market, stock markets, including DJIA SPX, experienced a slight decline in early Wednesday trading. The yield on the 10-year note BX:TMUBMUSD10Y was below 3.9%.

In summary, the U.S. housing market is on a path towards recovery as mortgage rates lower and homebuyers begin to take notice. However, challenges such as limited resale inventory and rising home prices still persist. The market reaction to these changes can be seen in the slight decline of stock markets in early trading.