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After nearly three years of grappling with an expensive housing market, home buyers are showing signs of getting used to it.
Though the data is still preliminary, it points to an emerging trend in which house hunters are adjusting to higher mortgage rates. Home transactions are broadly up over the past few months, and consumer sentiment toward buying a house is warming up.
“Home-sales momentum is building,” Lawrence Yun, the chief economist at the National Association of REALTORS®, a trade group, said recently. Consumers have grown accustomed “to a new normal of mortgage rates between 6% and 7%,” he added.
The two major pieces of data that suggest consumers are begrudgingly accepting a new, more expensive housing market are the recent increase in home sales and the uptick in housing sentiment.
In October and November, the latest months for which data was available, home sales increased, according to the NAR.
That trend was broad-based: The number of homes sold across most of the nation grew between October and November as buyers snapped up properties during a brief period of time when the 30-year mortgage rate fell close to 6%.
The median price of a home sold over that period was $406,100, which was up nearly 5% from the same month a year ago.
Additional data suggested that more buyers were on their way. Pending home sales, which refer to contracts signed a month or two before a home is sold, also rose in November in most regions.
At that point, Yun said, “consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory.”