For home sales, it's wait until next year

Driven by falling interest rates and prices, 2024 is "shaping up" to be a better year for real estate transaction activity, November's Remax National Housing Report predicts.

Home sales in November dropped by 9.8% compared with October and declined 6.5% versus the same period last year, part of the normal seasonal pattern, the real estate and mortgage broker franchisor said.

While the number of homes for sale dropped 1.6% from October, new listings were up 1.5%. On a year-over-year basis, inventory was down 2.6% while new listings were off by 19.1%.

Existing home sales increased 0.8% in November from October, the National Association of Realtors said on Wednesday. Meanwhile, housing starts reached a six-month high, data released by the government on Tuesday noted.

"When we look at the national picture, it's a collection of local snapshots, each with different conditions," Nick Bailey, Remax's president and CEO, said in a press release. "As the report shows, new listings in a few markets, including Omaha and Orlando, were up more than 25% year over year, while they decreased in others."

A recent report from competitor Redfin found that listings increased on an annual basis for the first time in over a year-and-one-half, albeit by just 0.1%. On a month-to-month seasonally adjusted basis they were up by 1.3%, which Redfin noted is the highest level in over a year.

"Buyers today have more options to choose from, which is taking pressure off of home prices," as mortgage rates dropped below 7% last week," said Redfin Senior Economist Sheharyar Bokhari in a press release about its home price index. "That news seems to have lured more sellers to the market, which should further improve home buying conditions in the new year."

In the 52 markets tracked by Remax, the median sales price of $405,000 was down 1.2% compared with October, but up 3.3% from November 2022.

November ended with 2.6 months of inventory, slightly higher than October's 2.3 months and 2.5 months one year ago.

That Redfin home price index report noted growth slowed for the third consecutive month in November. Values were 0.6% higher compared with October, which Redfin stated is the smallest monthly increase since June. They were also up by 6.4% from a year earlier.

In December, new listings being added have been climbing even faster than November's pace, Redfin noted. It reported double-digit year-over-year increases in homeowners contacting its agents to inquire about putting their property on the market.

However, some have commented that rates have not fallen by enough to counter the lock-in effect keeping existing homeowners in place. The California Association of Realtors is also bullish on the housing market for 2024.

"While sales have been weak for the past several months, a tight supply of homes for sale is keeping home prices from falling," said Chief Economist Jordan Levine in a press release. "Going into 2024, the recent decline in mortgage rates, along with the upward momentum in home prices, could motivate more would-be sellers to list their homes for sale in the spring homebuying season."

November's sales pace of 223,940 units in the state on a seasonally adjusted basis was down 7.4% from 241,770 in October and 5.8% lower versus a year ago, when a revised 237,730 homes were sold.

Annual sales declined 29 consecutive months, but this was the lowest drop-off in the last 20, C.A.R. said.

"With mortgage rates dropping to the lowest level in four months in recent weeks and the Federal Reserve indicating it plans to cut rates more than previously anticipated in 2024, more prospective homebuyers could reenter the market early next year." Melanie Barker, the organization's president said.