The current real estate market is complex, with multiple factors influencing each other.

Interest Rates and Existing Home Sales

Mortgage rates are on the rise, but existing-home sales are on the rise. 3.96 million existing homes were sold in October, the first year-over-year increase since July 2021, and the market is roughly balanced with higher median prices and increased inventory.

Regional Inventory and Sales

Regionally, Realtor.com® data show that inventory recovery has been strongest in the South and West, which have seen the fastest growth in home sales and the smallest gains in home prices over the past year.

Home Construction

Increased home construction is needed to improve inventory, and it is a good sign that homebuilder optimism is on the rise. construction was mixed in October, with little change in the number of building permits during the month, but permits are down year-to-date as permits for high-density multifamily dwellings are down, and the number of housing starts is following a similar trend.

Fourth, the impact of interest rates on sales

Mortgage rates climbed to 6.84% this week, which is expected to hamper home sales in early 2025. Mortgage applications for home purchases rose 2% this week, but fell 1% from a year ago, the first annual decline in nine weeks, after eight weeks of annual growth that had signaled a positive trend, may now signal a decline in existing home sales.

Inventory and election impact

On the inventory front, Realtor.com data showed pending home sales climbing, new sellers gaining momentum, list prices slipping, and time on market 10 days longer than a year ago, the biggest slowdown since July 2023. A post-election survey found that most homebuyers felt the election results did not affect home-buying plans, with about one in five Republicans more likely to buy a home as a result of the election and 24 percent of Democrats less likely to buy a home in the next 12 months.