In November, U.S. home sales rose 6.1% compared with the same month a year earlier, marking the biggest annual jump since 2021. The boost was due to more homes being available and a brief drop in mortgage rates, which gave buyers more options.
Earlier, many homeowners were reluctant to sell, holding onto low mortgage rates they had locked in. But now an increase in available homes is helping ease some pressure in the sluggish market.
Still, the housing market is being hammered. The overall recovery has been slow, weighed down by economic uncertainties and lingering effects of the pandemic.
The number of homes for sale in November hit 1.33 million, up 17.7% from November 2023 but 2.9% lower than October 2024. The surge in inventory is partly because more homeowners are deciding to sell due to life changes such as new jobs or growing families. After years of waiting, many are now listing their homes.
Even with more homes on the market, however, prices remain high. The national median price for an existing home in November was $406,100, up 4.7% from a year ago. High prices and volatile mortgage rates are making affordability a headache for buyers.
The Federal Reserve’s interest rate cuts earlier in the year helped briefly, but mortgage rates for a 30-year fixed loan have recently risen to 6.72%. Higher rates mean buyers have to spend more on monthly payments, making it harder for many to qualify for loans or save for down payments.
The future of the housing market in 2025 will largely depend on mortgage rates. If rates continue to rise, more buyers may hold off, leading to fewer sales. But if rates fall, it could boost demand, making homes more affordable for more people.
Although November’s sales offer some optimism, high prices and unpredictable mortgage rates still pose hurdles. Whether that improvement is the start of a lasting recovery remains to be seen.
