Homes sold in November at fastest pace in 10 months

The strong housing market comes amid a growing economy that faces pressure from high inflation and worries about the Omicron variant of the coronavirus. The new viral variant could reduce consumer spending during the holiday shopping season, especially spending on direct services like travel, entertainment and dining.

Consumer confidence increase in december from november but still far below levels seen at the start of the summer, the Conference Board, a private research group, said Wednesday. The survey may not fully reflect the recent increase in cases driven by the Omicron variant, but it does show that earlier this month, consumer anxiety about rising prices and the pandemic has decreased slightly.

The Commerce Department also said the economy in the third quarter grew slightly faster than previously estimated. U.S. gross domestic product grew at a seasonally adjusted 2.3% annual rate, up from the 2.1% rate previously reported, the department reported.

Housing has been one of the bright spots for the overall economy this year. Buyers have been motivated by low interest rates, higher household savings and a desire for more space to work from home. Demand has also been driven by a big wave of millennials grow old into their most important home-buying years.

Meanwhile, the supply of homes for sale has fallen to a record low at the start of the year and is well below the full-year level, according to NAR. House prices have skyrocketed as buyers were competing for a limited number of homes. The NAR said the average existing home price rose 13.9% in November from a year earlier, to $353,900.

The holiday season and cold weather in some parts of the country often dampen home sales near the end of the year. But activity hasn’t slowed much in recent weeks. Doug Duncan, chief economist at Fannie Mae, said buyers may have rushed to buy before home prices rose further or interest rates continued to rise.

“Overall home sales have been stronger than we anticipated,” he said.

Mortgage rates have risen slightly over the summer but are still far below pre-pandemic levels. The average rate on a 30-year fixed-rate mortgage was 3.12% as of December 16, according to the mortgage finance giant.

Freddie Mac.

Federal Reserve officials pointed out they may move to increase the price as early as spring 2022.

Economists and real estate agents say demand is likely to continue to grow strongly next year. Shoppers who have turned to the sidelines out of frustration are ready to return to the market if there is any sign of opportunity, dealers said.

“We definitely still have more buyers than homes,” said Jason Moon, a realtor at Trueblood Real Estate in northwest Indiana.

The market is still fast-paced, and many homes are selling above list price. The typical home sold in November was on the market for 18 days, NAR said, unchanged from the previous month.

The market is particularly competitive at lower prices, where Buyers with limited cash may be outbid by investors or cash buyers. About 24% of existing home sales in November were purchased with cash, up from 20% a year earlier, NAR said.

The share of first-time buyers in the market fell to 26%, the lowest since January 2014 and down from 32% a year earlier.

Collin and Ariana Schwartz, both 31, are looking to buy their first home in the Atlanta area.

“In this market, for us, it feels like you got lucky,” said Mr. Schwartz. “When you have larger financial institutions come in and only bid $30,000 off the asking price without seeing the asset, we can’t really compete with that.”

There were 1.11 million homes for sale at the end of November, down 13.3% from a year earlier, NAR said. At the current rate of sales, there were 2.1 months of home supply on the market at the end of November.

On a seasonally adjusted basis, the number of homes for sale in November fell to a record low, according to realtors.

Red fins Corp.

“If you are halfway interested in [a home on the market]“You have to have your finger on the trigger to be ready to go,” says Robbie Breaux, a dealer in Lafayette, La., said Robbie Breaux, a dealer in Lafayette, La.

Jaime Vargas Cruz and James Matias decided to sell their three-bedroom home in Buffalo, NY and buy a larger one after Mr. Vargas Cruz took a new job this summer in customer service. They listed their home in July and signed the contract within a week.

With a budget of $250,000, they shop for homes listed under $220,000, so they can make an offer above the list price. “We know that these [listed] with $250,000 would be $280,000 and $290,000,” said Mr. Vargas Cruz.

They got a fifth offer for around $260,000 and moved in last month.

“We are very, very happy,” said Vargas Cruz. “This is definitely the house we are looking to develop into.”

News Corp,

owner of Journal, also operates Realtor.com under license from NAR.

—Harriet T Bug contributed to this article.

Write letter for Nicole Friedman at nicole.friedman@wsj.com