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Existing Home Market: November 2023

During COVID when mortgage rates reached a record low of 3.0% both existing home purchases and refinancings soared. When the Fed increased interest rates to combat inflation in April 2022 mortgage rates increased and sales dropped off. In addition, home sellers pulled back in order to retain their mortgage rates.


Existing homes for sale have a seasonal pattern with December being the low for the year.

Homes for sale have been drifting down since 2011 and reached a low as COVID diminished and mortgage rates were at record low levels prior to the Fed increasing interest rates in April 2022 in response to rising inflationary fears. Potential sellers who have low mortgage rates desire to retain these low rates.


Existing Home---Months of Inventory remain near record lows.

Pending Home Sales Index has materially decreased from their record highs--initially due to a lack of homes for sale AND rising mortgage rates and higher home prices.


Prior to COVID, the Days on Market (DOM is the blue line) had been gradually decreasing. After COVID the days on the market reached record lows and is now 25 Days as of November 2023. 62% of all properties sell in ONE MONTH (red line).


Mortgage rates are now well above 5.00% (red bars). In late 2022 rate decreased slightly and home sales have picked up. In Feb 2023 rates were 6.09% and increased to 7.76% by Nov.

Home prices are the dashed green line that has floated along. This has occurred in the past when rates rose----future near-term home buyers rushed into the market to buy before mortgage rates rose further. Now that they are gone, home prices have varied. Higher-end home sales have pulled back.


Median home prices for all regions accelerated in early 2022 just as mortgage rates rose, and demand surged. As mortgage rates rose in 2023, prices have moderated.


The National Association of Realtor’s Pending Sales Index has been declining from their record highs with substantial declines noted in the South and West regions. The declines are a combination of:

1. Higher mortgage rates (mortgage rates decreased in late 2022 and pending sales increased).

2. Higher home prices

3. Relatively few homes for sale


Distressed-related home sales remain at record low levels. With recent home price appreciation, distressed homeowners will be able to sell and not sustain equity losses due to foreclosures.

First time home buyers have decreased as mortgage rates and home prices have increased. Record low mortgage rates allowed 5 times income ratios; the ratio now is 3.6 based on 6.61%. That is a ~25% decrease in purchasing power All cash purchases have increased even though investor purchases have been flat.

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