Existing Home Sales, which reflect closings on existing homes, beat estimates in November with a 4.8% increase from October. Sales were also 6.1% higher than a year ago, which the National Association of REALTORS ® (NAR) noted was the largest annual increase since June 2021.
What’s the bottom line?
The rise in closings last month makes sense, as the data likely reflects people shopping for homes in September and October, capturing buyers taking advantage of the decline in rates at that time. This uptick in buyer demand also comes when inventory is still well below pre-pandemic norms. There were 1.33 million units available for sale at the end of November (-2.9% MoM and +17.7% YoY), though many homes counted in existing inventory are under contract and not truly available for purchase. In fact, there were only 953,000 “active listings” at the end of last month, so inventory is tighter than the reporting implies. NAR’s Chief Economist, Lawrence Yun, confirmed, that “more buyers have entered the market” and “home sales momentum is building.” This pent-up demand for homes combined with ongoing tight supply continues to bode well for housing as an investment and continued home price appreciation over time.