Existing home sales sank more than expected in November, as rising mortgage rates and low inventory reduced buyer affordability and options.
The National Association of Realtors (NAR) reported existing home sales slumped 7.7% last month to an annual rate of 4.09 million, fewer than economists had predicted. It was the tenth consecutive month of declines.
NAR Chief Economist Lawrence Yun said the real estate market was “frozen” in November, with sales activity resembling that seen during the COVID-19 lockdowns in 2020.
High Mortgage Rates
Yun explained that the biggest factor in the drop was the “rapid increase in mortgage rates,” which limited what potential purchasers could afford and discouraged current homeowners from putting their houses on the market.
The NAR noted that the inventory of unsold homes fell for the fourth consecutive month to 1.14 million, or the equivalent of 3.3 months’ supply at current selling rates.
The report added that the median price of an existing single-family home was $370,700, a jump of 3.5% from a year ago, although the lowest it’s been since February.