The data shows that existing home sales increased by 0.8% in November, with an annualized rate of 3.82 million units. Although still close to the lowest level since 2010, this exceeded economists' median forecast of 3.78 million units. However, compared to the same period last year, existing home sales still declined by 7.7%.

Currently, high borrowing costs and elevated home prices make the resale housing market less attractive to both buyers and sellers, contributing to the ongoing shortage of housing supply. The affordability index for home prices reached its historic low in the third quarter. Despite recent declines in financing costs, with a 30-year mortgage rate below 7%, it is still twice as high as two years ago.

High borrowing costs dissuade homeowners with locked-in low interest rates from selling their existing homes, further exacerbating the housing supply issue. However, builders see this as an opportunity and are meeting market demand by offering generous incentives. Government data indicates a surge in housing starts to a six-month high in November.

Lawrence Yun, Chief Economist at NAR, states that the recent softness in existing home sales is mainly due to higher mortgage rates in October, while actual property transfers occurred in November. However, with the recent significant drop in mortgage rates over the past few weeks, a noticeable change in the situation is expected.

Yun notes that existing home sales may have hit a cyclical low, but he also suggests that a significant recovery may not be evident in the next two to three months. Although mortgage rates have recently decreased, it takes time for the market to adapt and respond. He emphasizes that borrowing costs remain a primary concern for both buyers and sellers.