The used homes market rebounded in November as sellers show a willingness to offload their homes amid a decline in mortgage rate that is offering opportunities for buyers and sellers who had stayed out of the market amid elevated borrowing costs for home loans.
The National Association of Realtors (NAR) said on Wednesday that used home sales jumped by nearly one percent, breaking five months of negative data, with the Midwest and Southern parts of the country showing an improvement even as the Northeast and the West continued to struggle. Transactions for single-family homes, townhomes, condominiums and co-ops hit more than 3.8 million.
The improvement in used homes adds another encouraging sign to the housing market that has struggled amid high mortgage rates and elevated prices. The existing homes was frozen as sellers had been reluctant to enter a market that might require them to replace their homes with new mortgage rates that in October had hit 8 percent.
But over the last few weeks mortgage rates have slowly been coming down and for the week ending December 15, borrowing costs for a home loan went under 7 percent.
“With the positive news about the drop in inflation, and [the Federal Reserve policymakers] projections proclaiming a pivot towards rate cuts, the 30-year fixed mortgage rate reached its lowest level since June 2023, declining to 6.83 percent,” Mike Fratantoni, Mortgage Bankers Association’s chief economist, said in a statement shared with Newsweek.
Analysts at NAR struck a cautious optimistic note about the market going forward.
“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,” Lawrence Yun, NAR’s chief economist, said in a statement shared with Newsweek. “A marked turn can be expected as mortgage rates have plunged in recent weeks.”
The surprising increase of used home sales came in as mortgage rate began their descent at the end of October and could portend a growth in the market, Hannah Jones, an economic research analyst at realtor.com, told Newsweek.
“It kind of signals that as mortgage rates fell through November that perhaps we can expect existing home sales to climb even more,” Jones said.
Prices in November shot up 4.0 percent from a year ago to $387,600, the fifth month in a row of yearly price increases, NAR data said.
Buyers picked up what was available in the market but they were still…
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