November 2024 Housing Market: Sales, Inventory, and Mortgage Rates
The November 2024 housing market marked a significant month, with sales of existing homes rising 5% from October and 6% from the same time last year. Similarly, the median existing-home price climbed 5% year-over-year, reaching $406,100. However, while inventories improved by 18% compared to last year, the supply remains at a historically low 3.8-month level, well below the 6-month supply indicative of a balanced market.
November 2024 Housing Market Trends Include Inventory and Mortgage Challenges
Sales of both existing and new homes posted strong growth in November. Existing home sales increased by 5% month-over-month and were 6% higher year-over-year. Similarly, new home sales rose 6% from October and were up by 9% compared to last year. These gains reflect sustained demand despite broader economic uncertainties. However, limited inventory continues to strain the market.
Although inventory levels improved by 18% compared to last year, the housing market remains undersupplied with just a 3.8-month supply nationally. This is far below the 6-month benchmark for a balanced market, intensifying competition among buyers. Low inventory levels also limit options for prospective homeowners and investors, driving up prices further. Sellers maintain a strong position in negotiations, while buyers face pressure to act quickly. Developers see opportunities to address supply gaps, particularly in underserved areas.
Meanwhile, higher mortgage rates have added to the challenges. The Federal Reserve’s rate hikes have pushed borrowing costs to levels not seen in years. As a result, mortgage applications have declined significantly: refinance applications fell 36% week-over-week but remained 10% higher than last year, while purchase applications dropped 13% week-over-week and were down 17% compared to last year. Elevated rates are reducing affordability for buyers, dampening enthusiasm for purchases and refinances alike. While cash buyers and investors may find opportunities in distressed properties, average buyers are increasingly cautious.
Inflation, Economic Pressures, and Opportunities
Shelter costs remain a key contributor to elevated inflation levels, complicating efforts by the Federal Reserve to bring inflation closer to its 2% target. Additionally, rising costs in other categories, such as new and used vehicles, reflect broader economic challenges. These inflationary pressures underscore the critical need for innovative approaches to improve affordability in the housing market. Despite these obstacles, the market’s resilience signals underlying strength.
Even with higher mortgage rates and tight inventories, the current market offers promising opportunities for real estate stakeholders. Investors and developers can focus on underserved markets with strong demand for affordable housing solutions. Creative financing options, such as adjustable-rate mortgages or lender-assisted programs, can help buyers navigate higher borrowing costs. Additionally, regions experiencing higher inventory growth or less price inflation may provide better conditions for buyers and investors.
Real estate professionals who adapt to these trends, leveraging innovation and regional opportunities, can position themselves for success despite headwinds. Addressing supply constraints, affordability challenges, and evolving buyer preferences will be essential to thriving in the current landscape.
Looking Beyond the November 2024 Housing Market
November’s housing market data paints a complex picture of growth amid challenges. While home sales and prices rose, limited inventory and higher mortgage rates pose ongoing obstacles for buyers and sellers. Stakeholders must remain agile, leveraging opportunities to innovate and meet demand in this dynamic environment.
As we look ahead, understanding these trends will be essential for navigating the evolving real estate landscape. By addressing affordability concerns and embracing innovative solutions, the housing market can continue to thrive despite economic uncertainties. For further insights into the November 2024 housing market, contact the title and escrow specialists at Plymouth Title Guaranty Corporation.
