High house prices, stubbornly high mortgage rates and dwindling supply are all taking a toll on potential buyers.
Pre-owned home sales rose just 0.5% in November compared to October and were 1% lower than in November 2024, according to the National Association of Realtors. Sales reached an annualized rate of 4.13 million units.
This count is based on signings and therefore reflects contracts likely signed in September and October, when mortgage rates first fell slightly but then remained within a narrow range.
Supply, which had increased for much of this year, declined in November. There were 1.43 million homes for sale at the end of the month, down 5.9% from October but up 7.5% year-over-year, according to the association. At current sales rates, this represents a 4.2 month supply. A six-month supply is considered balanced between buyer and seller.
“Inventory growth is starting to stagnate,” Lawrence Yun, chief economist at Realtors, said in a statement. “With distressed property sales at historic lows and real estate wealth at an all-time high, homeowners are in no rush to list their properties during the winter months.”
Sellers in the market have also started delisting their properties at a higher rate than usual. Sellers often take unsold homes off the market as winter approaches, but that dynamic was much stronger this year.
And this keeps the pressure on real estate prices. The median price of a home sold in November was $409,200, an increase of 1.2% from November 2024 and the highest November figure on record. Real estate agents use a median measurement, which can skew which part of the market sells the most. The high end is currently doing much better than the low end. Sales of homes priced between $100,000 and $250,000 were down almost 8% from a year ago, while those priced over $1 million were up 1.4%.
“Wage growth outpaces house price increases, improving housing affordability. However, future affordability could be hampered if housing supply fails to keep pace with demand,” Yun said.
Homes are staying on the market longer, 36 days compared to 32 days last November. First-time home buyers accounted for 30% of sales, unchanged from last year, but historically they represent around 40%. Investors returned to the market, accounting for 18% of transactions, compared to 13% in November 2024.