Existing home sales fall for the first time in 5 months

Despite November drop, sales figures are up nearly 26% YOY with inventory at a new low

National /
Dec.December 22, 2020 11:55 AM
There were 6.69 million homes sold in November, seasonally adjusted, a 2.5 percent drop from 6.85 million in October, according to NAR. (iStock)

There were 6.69 million homes sold in November, seasonally adjusted, a 2.5 percent drop from 6.85 million in October, according to NAR. (iStock)

Homebuyers took a step back last month, as the number of homes on the market reached a new low.

There were 6.69 million homes sold in November, seasonally adjusted, a 2.5 percent drop from 6.85 million in October, according to the National Association of Realtors’ monthly report.

Every region saw a decline or flat sales figures last month compared to October — though the number of sales are still up significantly year over year. Nationwide, November’s sales were up nearly 26 percent from a year ago.

Inventory also continued to tighten, hitting a record low for the second consecutive month. Total housing inventory was 1.28 million units, down 9.9 percent from October’s record low of 1.42 million. November’s inventory is down 22 percent from a year ago, when there were 1.64 million units on the market. At the current sales pace, last month’s inventory will be sold in 2.3 months.

Despite the low supply, prices slipped with the wane in demand from buyers. The median sales price was $310,800 in November, down from $313,000 in October. But the price was up about 15 percent compared to the median of $271,300 a year earlier.

Lawrence Yun, NAR’s chief economist, said November’s report was “a marginal step back,” and maintained his view that the housing market would continue to perform well into 2021.

“Sales for all of 2020 are already on pace to surpass last year’s levels,” he said in a statement.

But there are some economists who question how much longer the housing market’s record year can continue. They argue that lower-income households are being left behind as lenders tighten their criteria for borrowers and job loss related to the pandemic continues.

There are also signs that buyer demand is waning. NAR’s index tracking pending homes sales, which is seen as a leading indicator for future sales of existing homes, has declined for the past two months.

Yun acknowledged that rising prices as a result of the past year’s surge in demand has pushed homeownership out of reach for some buyers, particularly first-time buyers who can’t rely on the sale of a previous home to finance a down payment.

But, citing the $892 billion stimulus package Congress passed Monday, distribution of the vaccine and “very strong demand for homeownership,” Yun maintained that “robust growth is forthcoming for 2021.”






    Related Articles

    arrow_forward_ios
    Book on Suburbs Offers Ideas to Retrofit Them
    How builders are changing America’s suburbs to fit the times
    How builders are changing America’s suburbs to fit the times
    The median existing-home price exceeded $300,000 for the first time last year (iStock)
    Vicious cycle creates “huge supply crunch,” pushing home prices up
    Vicious cycle creates “huge supply crunch,” pushing home prices up
    Overall, the number of housing units that started construction last year was up 7 percent from 2019. (iStock)
    Residential construction had busiest year since 2006: MBA
    Residential construction had busiest year since 2006: MBA
    (iStock)
    Homebuilder sentiment falls for second month in a row
    Homebuilder sentiment falls for second month in a row
    (iStock)
    Homebuying up again, but rising mortgage rates depress refinancing
    Homebuying up again, but rising mortgage rates depress refinancing
    Fidelity’s Raymond Quirk (iStock)
    Title insurers launch new closing tools as homebuying rises
    Title insurers launch new closing tools as homebuying rises
    Joan Collins and 110 East 57th Street #8EFG (Getty, BHS)
    Soap star Joan Collins lists longtime Midtown pied-à-terre
    Soap star Joan Collins lists longtime Midtown pied-à-terre
    Jenna Ryan was part of a group who flew on a private plane from Denton, TX, to Washington, D.C., with the intention of joining the protestors (Twitter.com/DotJenna)
    Texas Realtor faces criminal charges for role in Capitol attack
    Texas Realtor faces criminal charges for role in Capitol attack
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...