The numbers: Sales of previously-owned homes decreased 1.7% in November thanks in large part to the constrained inventory of homes for sale.
Existing-home sales occurred at a seasonally-adjusted annual pace of 5.35 million, down from a revised 5.44 million in October, the National Association of Realtors reported Thursday.
The consensus among economists polled by MarketWatch prior to the November data release was that home-sales activity would have remained at the pace set in October. Nevertheless, the pace of existing-home sales was higher than a year ago when the rate came in at 5.21 million.
What happened: The median sales price for existing homes in November was $271,300, which was 5.4% higher than a year ago. The number of homes that sold for $250,000 or less fell in November compared with a year ago, including a 16% reduction in the number of homes that were priced below $100,000 and a 4% drop in the number of homes priced between $100,000 and $250,000.
Overall, home prices have increased on an annual basis for 93 consecutive months, the National Association of Realtors reported.
The inventory of homes for sale dropped yet again, falling to a 3.7-month supply from a 3.9-month supply in October. The general rule of thumb is that a 6-month supply is indicative of a balanced market.
Big picture: The U.S. housing market has an inventory crisis on its hands. Multiple factors — including baby boomers aging in place and home builders’ post-recession struggles — have created the current situation in which many buyers are struggling to find a home to purchase in the first place, let alone one they can afford.
Home-building activity has picked up in recent months in the wake of lower mortgage rates, but housing experts are skeptical that it will meaningfully solve the housing shortage. Consequently, home prices will likely continue their upward climb, pricing more and more people out of the housing market.
Some economists anticipate that this could put a damper on housing-market activity next year, even though home-buying demand remains extremely high.
What they’re saying: “This was a surprising drop in home resales that few people foresaw,” said Holden Lewis, housing and mortgage expert at personal-finance website NerdWallet. “After all, mortgage rates were about one percentage point lower in November than they were the previous November, which made homes more affordable than they otherwise would be. This unheralded decline in home sales will freshen a debate about the economy’s prospects in 2020, and whether consumer confidence is about to head downward.”