Homes Sold in November at Fastest Pace in 10 Months

Existing-home sales are on track for their strongest year since 2006, and sales in the first 11 months of the year rose 10% from a year earlier, NAR said. Low interest rates, combined with higher household savings and a desire for more space to work from home, prompted buyers to enter the market. A large wave of millennials aging into their prime home-buying years also fueled demand.

At the same time, the supply of homes for sale dropped to a record low at the beginning of the year and has stayed well below normal all year.

As buyers compete for a limited number of homes on the market, home prices soared. The median existing-home price rose 13.9% in November from a year earlier, NAR said, to $353,900.

“Determined buyers were able to land housing before mortgage rates rise further in the coming months,” said

Lawrence Yun,

NAR’s chief economist. Existing-home sales could ease next year if mortgage rates rise, he said.

Economists surveyed by The Wall Street Journal expected a 2.5% monthly increase in sales of previously owned homes, which make up most of the housing market.

The holiday season and cold weather in some parts of the country typically curtail home sales near the end of the year. But activity hasn’t slowed much in recent weeks. Buyers might have been in a rush to purchase before home prices rose further or interest rates ticked upward, said

Doug Duncan,

chief economist at Fannie Mae.

“Home sales in general have been stronger than we anticipated,” he said.

Mortgage-interest rates have increased slightly from the summer but are still well below pre-pandemic levels. The average rate on a 30-year fixed-rate mortgage was 3.12% as of Dec. 16, according to mortgage finance giant

Freddie Mac.

Federal Reserve officials have indicated they could move to raise rates as soon as spring of 2022.

Shoppers who were frustrated by the market this year and opted not to buy could return in 2022, say real-estate agents, keeping demand strong in the coming year.

The market remains fast-paced, and many homes are selling above listing price. The typical home sold in November was on the market for 18 days, unchanged from the prior month, NAR said.

There were 1.11 million homes for sale at the end of November, down 9.8% from October and down 13.3% from November 2020. At the current sales pace, there was a 2.1-month supply of homes on the market at the end of November.

On a seasonally adjusted basis, the number of homes for sale in November fell to a record low, according to real-estate brokerage

Redfin Corp.

“If you’re halfway interested in [a home on the market], you’ve got to have your finger on the trigger ready to go,” said Robbie Breaux, an agent in Lafayette, La. “You’ve got 50 people looking at the same three houses as everybody else is.”

Jaime Vargas Cruz and James Matias decided to sell their three-bedroom house in Buffalo, N.Y., and buy a bigger one after Mr. Vargas Cruz got a new job this summer in customer service. They listed their house in July and went under contract within a week.

With a budget of $250,000, they shopped for homes listed below $220,000, so they could make an offer above the listing price. “We knew that those [listed] at $250,000 would go for $280,000 and $290,000,” Mr. Vargas Cruz said.

They got their fifth offer accepted for about $260,000 and moved in last month.

“We are very, very happy,” Mr. Vargas Cruz said. “This is definitely the house that we are looking to grow into.”

The market is especially competitive at lower price points, where buyers with limited cash can be outbid by investors or cash buyers. About 24% of November existing-home sales were purchased in cash, up from 20% a year earlier, NAR said.

The share of first-time buyers in the market fell to 26%, the lowest level since January 2014 and down from 32% a year earlier.

Existing-home sales rose the most month-over-month in the South, up 2.9%, and in the West, up 2.3%.

Building activity has increased due to the strong demand. Housing starts, a measure of U.S. home-building, rose 11.8% in November from October, the Commerce Department said last week. Residential permits, which can be a bellwether for future home construction, rose 3.6%.

News Corp,

owner of the Journal, also operates Realtor.com under license from NAR.

Write to Nicole Friedman at [email protected]