Last week, the latest real estate data revealed a weakening in the November 2022 housing sector. In the headline story, sales of existing homes fell for the tenth straight month.
Further complicating the United States real estate market, building permits and housing starts similarly declined. However, new single-family home sales increased for the second month in a row. This offers a beacon of hope to the real estate scene as 2022 comes to a close.
Existing Home Sales Plummet for Tenth Month in a Row
For the tenth month in a row, existing home sales plummeted, weaking the November 2022 housing sector. Statistically, home sales declined 7.7% in November. In addition, it reflects a 35.4% plunge in year-over-year home sales.
Similarly, existing single-family home sales experienced a 7.6% drop from the previous month. This marks a 35.2% drop since November 2021.
Reasons for Weaking November 2022 Housing Sector
According to the National Association of Realtors®, the rapid increase in mortgage rates coupled with low inventories hurt housing affordability. Furthermore, these factors brought sales activity to levels resembling those that existed during the COVID-19 lockdown.
Holistically, total housing inventory in November represented a supply of 3.3 months, unchanged from October. Naturally, this falls well below the equilibrium point of 6.0. The median existing home price for all housing types in November dropped to $370,700. Although this shows a decrease of 2.2% from October ($378,800), it does indicate a 3.5% increase from the November 2021 price of $358,200. The median existing single-family home price was $376,700 in November, down from $384,600 in October but up from the November 2021 price of $365,000.
Building Permits and Housing Starts Declined
Building permits and housing starts also fell amongst the November 2022 housing sector detractors. First, the number of issued building permits and housing starts declined in November from the previous month. Authorized building permits dropped 11.2% below the October rate. This marks a 22.4% decrease compared to the November 2021 pace. In November, issued building permits for single-family home construction also declined 7.1% under the October figure.
Meanwhile, November housing starts in November slid 0.5% below the October estimate. Statistically, this demonstrates a 16.4% a drop under the November 2021 rate. Notably, single-family housing starts fell 4.1% compared to the previous month’s tally.
New Home Sales Reflect Beacon of Hope for November 2022 Housing Sector
On a more optimistic note, home completions rose by 10.8% in November, 6.0% higher than the prior year’s total. In November, single-family home completions were 9.5% above the October rate.
Sales of new single-family homes increased for the second straight month in November, advancing 5.8% above the revised October rate. However, sales are down 15.3% from November 2021. Inventory of available single-family homes for sale stood at 8.6 months, down from the October rate of 9.3 months. The median sales price of new single-family homes sold in November was $471,200 ($484,700 in October), while the average sales prices was $543,600 ($533,400) in October.
For help with real estate investments, contact the financial advisors at IHT Wealth Management.
Want to read about the rest of the week ending on December 17th? Explore our additional resources below.
- End of Year Volatility Culminated in Stock Decline Before Christmas
- November 2022 Personal Income Shows Timely Increase
- Third-Quarter GDP Data Now Tells Story of Accelerating Economy
- Unemployment Insurance Sees 216,000 New Claims for December 17th Week
Information accredited to Broadridge.