• Housing demand remains fragile as high prices, elevated mortgage rates, and tightening supply continue to limit buyer activity despite a modest rise in existing home sales. 
  • Affordability pressures persist as a weakening labor market and economic uncertainty offset the limited relief from easing mortgage rates. 

Despite a slight uptick in existing home sales in November, the US housing market is still under pressure from high home prices, high mortgage rates, and constrained supply, all of which continue to affect buyer activity. 

Existing Home Sales Performance and Regional Breakdown 

Existing home sales came in at 0.5% in November, down from October’s 1% figure, with a total of home sales coming in at 4.13 million units. Since the data is based on completed sales rather than new contracts, it primarily represents transactions completed in September and October, a time when mortgage rates somewhat decreased but remained high. ⁽¹⁾  

Sales strength was led by the Northeast, which saw a 4.1% increase despite its relatively small share of the housing market. The South posted a 1.1% rise, while sales declined 2% in the Midwest, typically the most affordable region. Activity in the West was flat. ⁽²⁾  

Housing Supply and Inventory 

Supply fell in November, which had been consistently rising during this year. The inventory of previously owned houses dropped in October to an eight-month low, which caused limited options for buyers. ⁽³⁾  

ShapeSeller Behavior and Financing Conditions 

Sellers usually de-list their properties during the winter. However, this year’s changes were stronger. Sellers removed their properties off the market at higher rates than usual at a longer pace than last year. Comparing last year’s property listing of 32 days, this year was 36 days. 

The 30-year fixed mortgage rate fell this year from 7% in January to 6.19% at the end of November but remains elevated. ⁽⁴⁾  

Labor Market and Affordability 

A weakening labor market is helping push borrowing costs lower, with unemployment rising to 4.6% and wage growth slowing to its weakest pace since 2021. While slower wage growth has offered some short-term relief for housing affordability, limited housing supply could keep affordability under pressure. ⁽⁵⁾  

Broader Economic Context 

Economists said it was challenging to evaluate the housing market because housing starts and new home sales figures for September have not yet been released due to the recent 43-day federal government shutdown. 

Economic concerns tied to the labor market and higher prices reduced consumer sentiment in December.  The University of Michigan’s Consumer Sentiment Index came in at 52.9 in December, above November’s 51 figure, indicating weak demand and ongoing headwinds for the housing market. ⁽⁶⁾  

Sources: ⁽¹⁾ ⁽²⁾ ⁽³⁾ CNBC, ⁽⁴⁾ ⁽⁵⁾ ⁽⁶⁾ Reuters