Some people may have been surprised by the growth in existing home sales over the past two months, but they would have known what was happening if they had been following our weekly Housing Market Tracker data.
Not only has sales data improved, but home prices have risen so much that months ago I believed my national home price growth forecast of 2.33% for 2024 would be too low. On a year-over-year basis, the NAR median sales price index has been higher for three months in a row.
By NAR: Total existing home sales – completed transactions that include single-family homes, townhomes, condominiums and cooperatives – improved 4.8% from October to a seasonally adjusted annual rate of 4.15 million in November. On an annual basis, sales increased by 6.1% (vs. 3.91 million in November 2023).
The charts below provide context for four data sets in this report. The housing stock has decreased, as is usual for this time of year. We saw a drop in active listings from 1.37 million to 1.33 million, and monthly supply dropped from 4.2 months to 3.8 months. However, we see improvements from low inventory levels in 2022, which is encouraging.
How did we get here?
1. Purchasing application data grew
I don’t think many people track purchase requests the same way I do. I consistently analyze the data every week to identify trends in demand. In my experience, it is important to have approximately twelve to fourteen weeks of positive, forward-looking purchase request data to gain valuable insights. Earlier this year, when interest rates were falling, we had this kind of data.
When mortgage rates started falling in mid-June, this is what it looked like:
- 12 positive prints
- 5 negative prints
- 1 flat print
Purchase requests typically reflect sales activity 30 to 90 days in advance, meaning the growth we see should drive sales. Even more surprising is that despite rising mortgage rates over the past ten weeks, we are still seeing a positive trend in forward purchase data.
Past 10 weeks:
However, when we go out, we are no longer operating from record low levels, so keep that in mind going forward.
2. The weekly running contracts have also been improved
When you observe an increase in weekly purchase requests alongside an increase in weekly pending contract data compared to previous periods, it indicates that demand is growing. Our tracker data reflects these two trends, and if you connect the dots you’ll see that current contract data has improved since October.
Our weekly housing market tracker is designed to reflect current and expected demand. This way we can quickly identify any changes in housing construction before they appear in the traditional channels, using outdated data. You can read the latest report here.
