NAR: Existing-Home Sales Decreased to 4.09 million SAAR in November

Median Prices Down 10.4% from Peak in June 2022

From the NAR: Existing-Home Sales Dipped 7.7% in November

Existing-home sales declined for the tenth month in a row in November, according to the National Association of REALTORS®. All four major U.S. regions recorded month-over-month and year-over-year declines.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – waned 7.7% from October to a seasonally adjusted annual rate of 4.09 million in November. Year-over-year, sales dwindled by 35.4% (down from 6.33 million in November 2021).
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Total housing inventory registered at the end of November was 1.14 million units, which was down 6.6% from October, but up 2.7% from one year ago (1.11 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, which was identical to October, but up from 2.1 months in November 2021.
emphasis added

The sales rate was below the consensus forecast.

Sales in November (4.09 million SAAR) were down 7.7% from the previous month and were 35.4% below the November 2021 sales rate. Sales are now well below pre-pandemic levels and, excluding the pandemic decline, sales are now at the lowest level since 2011.

Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The second graph shows existing home sales by month for 2021 and 2022.

Sales declined 35.4% year-over-year compared to November 2021. This was the fifteenth consecutive month with sales down year-over-year.

The third graph shows existing home sales for each month, Not Seasonally Adjusted (NSA), for a few selected periods. Black and light Purple are the maximum sales per month during the bubble (2005) and the minimum sales during the bust (2008 - 2011). The most recent four years are shown (2019 through 2022).

Sales NSA in November (326,000) were 35.2% below sales in November 2021 (503,000).   Sales NSA year-to-date are down 16.2% compared to the same period in 2021.

This decrease, NSA, was similar to change in the markets I track each month.

Housing Inventory Decreased in November

The fourth graph shows nationwide inventory for existing homes.

According to the NAR, inventory decreased to 1.14 million in November from 1.22 million in October.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The fifth graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was up 2.7% year-over-year (blue) in November compared to November 2021. This includes some pending sales - and doesn’t match some other measures - and it seems likely that active inventory was up year-over-year much more in November than the NAR is reporting.

Months of supply (red) was unchanged at 3.3 months in November from 3.3 months in October.

Median House Prices

On prices, the NAR reported:

The median existing-home price for all housing types in November was $370,700, an increase of 3.5% from November 2021 ($358,200), as prices rose in all regions. This marks 129 consecutive months of year-over-year increases, the longest-running streak on record.

Median prices are distorted by the mix (repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices).

The YoY change in the median price peaked at 25.2% in May 2021 and has now slowed to 3.5%. The YoY increase in November was the lowest since June 2020. Note that the median price usually starts falling seasonally in July, so the 2.1% decline in November in the median price was partially seasonal, however the 10.4% decline over the last five months has been much larger than the usual seasonal decline.

It is likely the median price will be down year-over-year in a few months - and Case-Shiller will follow.

Existing home sales are being impacted by higher mortgage rates. Mortgage rates increased sharply in October, and that impacted closed sales in November and December - so December sales will probably be weak too - but sales might rebound a little in January since mortgage rates declined somewhat in November and January.