Introduction to the Housing Market
The housing market has been experiencing a slowdown in sales, with existing home sales rising only 0.5% in November from the previous month. Despite this, home prices continued to climb, with the national median sales price increasing 1.2% in November from a year earlier to $409,200, an all-time high for any November on data going back to 1999.
Slowing Sales
Sales of previously occupied U.S. homes rose in November from the previous month, but slowed compared with a year earlier for the first time since May despite average long-term mortgage rates holding near their low point for the year. Existing home sales rose 0.5% in the last month from October to a seasonally adjusted annual rate of 4.13 million units, the National Assn. of Realtors said Friday. Sales fell 1% compared with November last year. The latest sales figure came in slightly below the 4.14 million pace economists were expecting, according to FactSet.
Home Prices Continue to Climb
Home prices have risen on an annual basis for 29 months in a row, even as the housing market has been mired in a slump that began in 2022 when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years. Through the first 11 months of this year, home sales are down 0.5% compared with the same period last year.
Factors Contributing to Slowing Sales
Home sales got a boost this fall as the average rate on a 30-year mortgage declined at the end of October to 6.17%, the lowest level in more than a year. Even so, affordability remains a challenge for many aspiring homeowners, especially first-time buyers who don’t have equity from an existing home to put toward a new home purchase. Uncertainty over the economy and job market are also keeping many would-be buyers on the sidelines.
Impact on First-Time Buyers
A shortage of homes for sale, especially in the more affordable end of the market, continues to weigh especially on first-time home buyers. They accounted for 30% of homes sales last month. Historically, they made up 40% of home sales. An annual survey of home buyers by NAR showed first-time buyers accounted for an all-time low 21% of home purchases between July 2024 and June 2025, while the average age of such home buyers rose to a record-high of 40.
Inventory and Mortgage Rates
Homes purchased last month likely went under contract in September and October, when the average rate on a 30-year mortgage ranged from 6.5% to 6.17%, according to Freddie Mac. Mortgage rates have mostly remained close to their October low in recent weeks. Home shoppers who can afford to buy at current mortgage rates benefited from a wider selection of properties on the market last month than a year ago, although the number of homes for sale in November declined from the previous month.
Current Inventory Levels
There were 1.43 million unsold homes at the end of last month, down 5.9% from October and up 7.5% from November last year, NAR said. The latest inventory snapshot remains well below the roughly 2 million homes for sale that was typical before the COVID-19 pandemic. November’s month-end inventory translates to a 4.2-month supply at the current sales pace. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
Conclusion
In conclusion, despite slowing sales, home prices continued to climb last month, with the national median sales price increasing 1.2% in November from a year earlier to $409,200. The housing market is expected to continue to experience a slowdown in sales, with existing home sales stuck at around a 4-million annual pace. Affordability and uncertainty over the economy and job market remain challenges for many aspiring homeowners, especially first-time buyers.
FAQs
Q: Why are home prices still climbing despite slowing sales?
A: Home prices continue to climb due to a shortage of homes for sale, especially in the more affordable end of the market, and low mortgage rates.
Q: What is the current state of the housing market?
A: The housing market is experiencing a slowdown in sales, with existing home sales rising only 0.5% in November from the previous month.
Q: What is the average age of first-time home buyers?
A: The average age of first-time home buyers has risen to a record-high of 40, according to an annual survey of home buyers by NAR.
Q: What is the current inventory level of unsold homes?
A: There were 1.43 million unsold homes at the end of last month, down 5.9% from October and up 7.5% from November last year.
Q: What is considered a balanced market between buyers and sellers?
A: A 5- to 6-month supply of homes for sale is considered a balanced market between buyers and sellers.
