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