In November, U.S. existing home sales surged to their highest level in eight months. According to the National Association of Realtors (NAR), sales jumped 4.8% from the previous month to a seasonally adjusted annual rate of 4.15 million units, marking the strongest performance since March. This increase represents the second consecutive monthly rise and a 6.1% year-over-year gain, the largest annual boost since June 2021.
However, forecasts for the housing market in 2025 remain cautious. Higher interest rates and elevated home prices continue to pose challenges for buyers. While the Federal Reserve recently announced its third consecutive rate cut, it now anticipates only two more cuts next year, down from the four initially projected in September.
Housing inventory in November dropped by 2.9% to 1.33 million units, though this still reflects a 17.7% increase compared to the same time last year. Meanwhile, the median price of existing homes rose by 4.7% year-over-year to $406,100.
Despite these gains, first-time buyers accounted for just 30% of all purchases, well below the 40% typically associated with a robust housing market. Cash sales made up 25% of transactions, slightly down from 27% last year.
Overall, while the U.S. housing market shows signs of recovery, significant headwinds remain, with interest rates and broader economic policies expected to play a pivotal role in shaping its trajectory in the coming year.
