Mortgage

Fueled By Climbing Mortgage Rates, Existing-Home Sales Rise In November

Fueled by climbing mortgage rates, existing-home sales rise again
Written by Publishing Team

Existing home sales rose 1.9 percent from October to November 2021 to a seasonally adjusted annual rate of 6.46 million, according to the National Association of Realtors (NAR) existing home sales report released Wednesday. While the increase recorded three consecutive monthly increases in existing home sales, those sales were down 2% from the same period one year ago.

The median price of existing home sales increased significantly, 13.9 percent from $310,800 in November 2020 to $353,900 in November 2021.

Meanwhile, inventory continued to be scarce, down 13.3 percent year over year and 9.8 percent month over month to 1.1 million units, or 2.1 months of home supply at the current sales pace.

Lawrence Yun | Image credit: NAR

The National Association of Realtors’ chief economist, Lawrence Yun, said the looming threat of higher mortgage rates was likely a big motivating factor for buyers in November.

“Determined buyers have been able to secure housing before mortgage rates rise further in the coming months,” Yoon said in a statement. “The steady and steady payment of mortgage payments has spurred many consumers who are tired of rising rents over the past year.”

George Ratio, director of economic research at realtor.com, said the decline in inventory continued to hold back these potential buyers, although they had hoped to speed up their search due to mortgage rates.

George Ratiou | Credit: Realtor.com

“The possibility of higher interest rates in 2022 accelerates the decision for buyers in an otherwise slower season,” Ratio said in a statement. However, the low number of homes for sale remains the main challenge, baffling both current homeowners looking for their next home and first-time buyers looking for a place to call their home. There are less than half as many homes on the market now than there were two years ago. As we head into the December holidays and Americans gather together for family celebrations, many sellers will likely delay listing their properties until next year, further tightening available supply.”

Yoon expects the 30-year fixed-rate mortgage rate to stabilize around 3.7 percent by the end of 2022.

November saw the 17th consecutive month of annual average home price increases, the longest period of consecutive increases on record, and the result of persistent inventory shortages.

“Supply chain disruptions to build new homes and labor shortages have hampered bringing more inventory to market,” Yun said. “Therefore, home prices continue to rise due to the proximity of record low supply levels.”

Homes typically stayed on the market for the same amount of time in November as in October — 18 days — which is down from 21 days in November 2020. Meanwhile, 83 percent of homes stayed on the market for the same period of time. Less than a month before it was sold.

First-time home buyers accounted for 26 percent of home sales in November, down from 29 percent the previous month and from 32 percent a year earlier.

Second home buyers and investors accounted for 15 percent of home sales during November, down from 17 percent in the previous month and up from 14 percent in November 2020.

24 percent of sales were all-cash transactions, the same percentage as in October, and up from 20 percent a year earlier.

Distressed sales held steady at less than 1 percent of total sales, equal to the prior month and year prior.

The average commitment rate on a conventional 30-year fixed-rate mortgage was 3.07 percent in November, according to Freddie Mac, which is equal to the average rate in October, and is lower than the average commitment rate for all of 2020, which was 3.11. percent. .

Sales of single-family homes rose 1.6 percent from a seasonally adjusted annual rate of 5.66 million in October to 5.76 million in November, which was down 2.2 percent year on year. The current median price for a single-family home was $362,600 in November, up 14.9 percent from the previous year.

Meanwhile, sales of existing condominiums and co-ops rose 4.4 percent from the seasonally adjusted annual rate of 680,000 units in October to 710,000 units in November, which corresponds to November 2020. The average current apartment price rose 4.4 percent over the Annual basis to $283,200.

by region

Existing home sales saw the biggest growth in the South, with sales increasing 2.9% from October to November to an annual rate of 2,850,000, up 1.1% year over year. The average price rose 18.4 percent year-over-year to $318,900.

In the West, sales increased 2.3 percent month over month to an annual rate of 1,330,000, down 3.6 percent from the previous year. The average price rose 8.4 percent year-over-year to $507,200.

The Midwest saw a slight increase in existing home sales, 0.7 percent from October, to an annual rate of 1,520,000. But that number fell 0.7 percent year on year. Meanwhile, the average price rose 9.0 percent year-over-year to $260,100.

In the Northeast, existing home sales remained flat month over month at an annual rate of 760,000, down 11.6 percent from November 2020. The median price was up 4.7 percent year over year to $372,500.

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