US home sales declined in November after five monthly gains

Sales of previously owned homes slipped in November from a month earlier, as the supply of homes for sale fell to a new low.

Existing-home sales fell 2.5% in November from October to a seasonally adjusted annual rate of 6.69 million, the National Association of Realtors said Tuesday. The November sales marked a 25.8% increase from a year earlier.

Economists surveyed by The Wall Street Journal expected a 2.2% monthly decline in sales of previously owned homes, which make up most of the housing market.

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“Without a doubt, there are too many buyers in relation to the sellers,” said Lawrence Yun, NAR’s chief economist. “That is probably the main driver as to why the sales declined.”

Record-low interest rates have boosted home-buying demand in recent months. Existing-home sales rose for five straight months through October to the highest seasonally adjusted annual rate since 2006. At the same time, fears of virus transmission have made potential sellers wary of putting their homes on the market.

The supply of homes on the market at the end of November was the lowest level on record going back to 1982. A widespread shortage of homes for sale has prompted competition among buyers and pushed prices higher.

The median existing-home price rose 14.6% from a year earlier to $310,800, NAR said.

Rising prices are making it difficult for first-time buyers to enter the market, real-estate agents say.

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In Tacoma, Wash., almost every property is getting multiple offers, and first-time buyers are having to raise their budgets or look farther out of town to find homes they can afford, said Redfin Corp. agent Amber Allin.

The median existing-home price in Pierce County, where Tacoma is located, rose 16.9% in November from a year earlier, according to the Northwest Multiple Listing Service. “It is pushing a lot of buyers beyond where they would naturally be comfortable,” Ms. Allin said.

Carly and Andy Gerstlauer lost out on multiple houses before buying a three-bedroom home in Beaverton, Ore., in November. Their mortgage didn’t require a down payment, which made their home purchase more affordable but made them less competitive against other buyers, Ms. Gerstlauer said. “We were just getting so frustrated,” she said.

Home sales were especially strong at the high end of the market, with sales of homes priced at more than $1 million up 88% in November compared with a year earlier, according to NAR.

Demand for primary and second homes in Palm Beach, Fla., has surged due to the pandemic, said Blair Kirwan of Brown Harris Stevens. “We are seeing huge numbers of people that are coming down, looking at four or five houses in a weekend, and making a decision right then and there,” she said.

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There were 1.28 million homes for sale at the end of November, down 9.9% from October and down 22% from November 2019, according to NAR. At the current sales pace, there was a 2.3-month supply of homes on the market at the end of November, a record low.

Existing-home sales declined month-over-month in the Midwest, South and Northeast, and they were unchanged in the West.

Homes typically go under contract a month or two before the contract closes, so the November figures largely reflect purchase decisions made in October or September.

New-home sales have also climbed in recent months. A measure of U.S. home-builder confidence slipped in December after hitting a record high in November in data going back to 1985, the National Association of Home Builders said last week.

Housing starts, a measure of U.S. home-building, rose 1.2% in November from October, the Commerce Department said Thursday.

News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.

Write to Nicole Friedman at nicole.friedman@wsj.com