According to real estate brokerage Redfin, US home sales fell more than 35% year on

year in November, as mortgage rates reached their highest level in two decades,
pricing many potential buyers out of the housing market.

The drop was the largest since Redfin began keeping records in 2012, and it
coincides with data released on Wednesday showing that sales of previously owned
homes in the United States fell by the most in a year and a half in November.

"The housing market continued to cool in November as high housing costs kept buyers
and sellers on the sidelines," Redfin said in a report released Thursday.

According to mortgage lender Freddie Mac, the average rate for a 30-year fixed-rate
morning in the week ended November 10 was 7.08 percent, the highest average in
roughly two decades.

New listings fell 28.4% from November 2021 to November 2022, the second-largest
drop after April 2020, when many US cities were still in the early stages of Covid-
19 pandemic lockdown.

Redfin said there were early signs that demand was beginning to rise as mortgage
rates began to fall, but the improvement in some of the company's indicators has
yet to translate into more home sales.

In the week ending December 15, the average 30-year fixed-rate mortgage rate was
6.31 percent.

"The worst of inflation is probably behind us," said Redfin Economics Research Lead
Chen Zhao.

"As the Fed's actions continue to bring inflation down, which should ultimately
bring more homebuyers back to the market," Redfin predicts mortgage rates will fall
slightly more next year.

However, the housing market is still a long way from recovery, according to Zhao,
and prices may continue to fall in the near term.

Existing home sales in the United States fell to a two-and-a-half year low in
November, as the housing market was further strained by rising mortgage rates.

Existing home sales fell 7.7% last month to a seasonally adjusted annual rate of
4.09 million units, the lowest level since May 2020, according to the National
Association of Realtors on Wednesday.

This was the lowest level since November 2010, excluding the drop during the first
wave of the COVID-19 pandemic in the spring of 2020.

Sales have now fallen for ten months in a row, the longest such streak since 1999.

In November, they fell in all four regions.

Reuters polled economists, who predicted a drop in home sales to 4.20 million
units.

House resales, which account for a large portion of US home sales, fell 35.4% year
on year in November.

The Federal Reserve's quickest rate hike cycle since the 1980s has had the greatest
impact on housing.
The Federal Reserve of the United States is attempting to slow unacceptably high
inflation by lowering demand for everything from housing to labour.

According to reports this week, homebuilder confidence fell for the 12th
consecutive month in December, while single-family homebuilding and permits fell to
a 2-1/2-year low in November.

According to Freddie Mac data, the average rate on a 30-year fixed-rate mortgage
jumped to more than 7% a few months ago, the highest since 2002.

Though the rate has since dropped to 6.31%, it is still double what it was a year
ago.

Early in the pandemic, the housing market boomed as Americans sought larger
properties to accommodate home offices, driving up prices beyond the reach of many.

Even though demand is down, supply is tight, keeping home prices high, though the
rate of increase is slowing.

In November, the median existing home price increased 3.5% year on year to
$370,700.

It was still the highest November house price, and prices are still 37% higher than
pre-pandemic levels.

There were 1.14 million previously owned homes on the market, a 2.7% increase from
the previous year.

At November's sales pace, the current inventory of existing homes would be depleted
in 3.3 months, up from 2.1 months a year ago.

A four-to-seven-month supply is considered a healthy supply-demand balance.

"In essence, the residential real estate market was frozen in November," NAR Chief
Economist Lawrence Yun said.

Last month, properties were on the market for an average of 24 days, up from 21
days in October.

In November, 61% of homes sold had been on the market for less than a month.

First-time buyers made up 28% of all sales, up from 26% a year ago.

All-cash sales accounted for 26% of transactions, up from 24% a year ago.