US DATA
Existing home sales picked up sharply in November on a seasonally-adjusted basis, with the 4.8% M/M increase the largest since February, to the highest level since March at 4.15M annualized. That also represented a 6.1% Y/Y gain, the biggest rise since June 2021 (when sales were soaring versus the early pandemic period).
- Notably, inventory did not rise to match the rise in sales, and at 3.8 months it represented a fall from 4.2 in October and was the first sub-4 months reading since May. Median sales prices rose 4.7% Y/Y to $406.1k.
- Existing home sales remain subdued overall, however, both outright (peaking at 6.6M in 2021, with October's 4.15M very close to the pandemic lockdown lows) and relative to new home sales (which while at merely 600k are at least roughly around pre-pandemic levels). Again this is largely related to financing.
- While the NAR press release notes that the rise in existing sales is in part owing to "consumers get[ting] used to a new normal of mortgage rates between 6% and 7%", the broader data suggests housing sales activity remains mired in a deep recession with buyers and sellers at a standoff.
- This is only likely to be resolved by lower rates, allowing buyers greater affordability and sellers to ability to move without incurring a substantially higher mortgage rate, and/or higher unemployment which forces sales.
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