November home sales struggle as supply stalls
High home prices, stubbornly high mortgage rates and now dwindling supply are putting pressure on potential home buyers.
Sales of previously owned homes were up just 0.5% in November from October and were 1% lower than in November 2024, according to the National Association of Realtors. Sales amounted to 4.13 million units annually.
Because this number is based on closings, it likely reflects contracts signed in September and October, when mortgage rates initially dropped slightly but then remained in a narrow range.
Supply, which has been increasing for most of this year, fell in November. According to the association, there were 1.43 million homes for sale at the end of the month; This figure decreased by 5.9% compared to October and increased by 7.5% compared to the same period last year. At the current sales pace, this represents a 4.2-month supply. The six-month supply is assumed to be balanced between buyers and sellers.
“Inventory growth is starting to stall,” Lawrence Yun, chief economist for the Realtors, said in a statement. “With distressed property sales at historic lows and housing wealth at an all-time high, homeowners are in no rush to list their properties during the winter months.”
Sellers on the market also began delisting properties at a higher rate than usual. Sellers typically pull unsold homes off the market as winter approaches, but this dynamic was much stronger this year.
This continues to put pressure on house prices. The median price of a home sold in November was $409,200, up 1.2% from November 2024 and the highest on record for November. Real estate agents use a median measurement, which can bias the top selling end of the market. The top end is doing much better than the bottom end right now. Sales of homes priced between $100,000 and $250,000 were down nearly 8% from a year ago, while sales of homes priced over $1 million were up 1.4%.
“Wage growth is outpacing house price increases, which increases housing affordability. However, future affordability may be hampered if housing supply cannot keep up with demand,” Yun said.
Homes are staying on the market longer, with 36 days compared to 32 days last November. First-time homebuyers accounted for 30% of sales; this proportion is unchanged from a year ago, but historically it has been around 40%. Investors have returned to the market, accounting for 18% of transactions since November 2024, up from 13%.
