A modern Craftsman house and upward pointing arrows.
Illustration by Lanette Behiry/Real Estate News

Home sales up after 5 months of declines 

Before making a small gain in November, existing home sales had been on a downward trajectory since July.

December 20, 2023
3 minutes

Key points:

  • November is one of only three months this year to post an increase in existing home sales over the prior month.
  • Compared to a year ago, existing home sales are down 7.3%, and all four regions have seen declining sales in that time.
  • While median existing home prices are up year-over-year, prices have been dropping in recent months.

After a five-month run of slumping home sales, the National Association of Realtors has reported that November sales of all existing home types, including detached homes, condos and townhouses, posted a small but noteworthy gain of 0.8%. 

The slight uptick comes just a month after existing home sales saw the biggest drop this year, falling 4.1% in October. November is one of only three months in 2023 to see an increase in existing home sales over the previous month. 

Compared to one year ago, sales are still down 7.3%, but that's the smallest decrease of the year so far. For perspective, annual sales were down nearly 37% in January 2023, and declines remained in double digits through October.

According to NAR, the seasonally adjusted annual rate of home sales for November was 3.82 million, which is still well below a typical year but slightly higher than one month ago. Home sales fell in all four regions year-over-year, but were up in the Midwest and South compared to the prior month.

But things could be turning around. Bright MLS Chief Economist Dr. Lisa Sturtevant expects overall existing home sales to finish the year above 4 million — still "significantly lower than the 5.2 million annual homes sales that had been typical prior to the pandemic," she noted — and pick up in 2024.

"According to Bright MLS' forecasts, there will be 4.6 million home sales in 2024, and inventory will increase by about 8% by the end of the year."

Total housing inventory for November was about a 3.5-month supply, a slight dip from October, but an improvement from a year ago when supply sat at 3.3 months.

Home prices have also been on the decline. Since peaking at more than $410,000 in June, median prices have fallen each month, coming in at  $387,600 in November. Prices were still up 4.0% year-over-year, however, and "only a dramatic rise in supply will dampen price appreciation," said NAR Chief Economist Lawrence Yun. His comments come just two days after a report found increasing optimism among home builders going into the new year. 

Volatility in mortgage rates also continues to influence monthly existing home sale trends, Yun noted.

"The latest weakness in existing home sales still reflects the buyer bidding process in most of October when mortgage rates were at a two-decade high before the actual closings in November,"  he said. "A marked turn can be expected as mortgage rates have plunged in recent weeks."

Falling rates have spurred some optimism within the mortgage industry as well. Seeing rates approaching 6% could help initiate a "mini refi boom," Ward Morrison, president and CEO of Motto Mortgage told Real Estate News recently.

And lower rates could finally shake off the mortgage rate lock-in effect that has hampered inventory, Realtor.com Senior Economic Research Analyst Hannah Jones predicts.

"Though sellers won't necessarily hold off until mortgage rates fall to their current loan's level, the smaller the gap between the two, the more likely a homeowner chooses to sell," she said.

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