US Housing Market Shows Mixed Signals as Sales Rebound but Challenges Persist

Existing home sales hit an eight-month high in November, but high mortgage rates, limited inventory, and rising costs continue to weigh on the market.

• Existing home sales rose 4.8% in November to an annualized rate of 4.15 million, marking the highest level since March and a 6.1% year-over-year increase.
• The housing market remains constrained by elevated mortgage rates, projected to stay between 6% and 7% in 2025, and a persistent shortage of inventory, with a deficit of up to 4.5 million homes according to estimates.
• Single-family housing starts rebounded 6.4% in November, driven by recovery in the hurricane-affected South, but multifamily construction plummeted over 23%, dragging overall new-home starts to a four-month low.
• The median existing home price increased 4.7% year-over-year to $406,100 in November, while first-time buyers accounted for just 30% of sales, below the 40% threshold considered healthy for the market.
• Economists warn that potential tariffs, labor shortages from deportation policies, and rising construction costs could further hinder new homebuilding efforts in 2025, despite optimism around regulatory changes under the incoming administration.

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