The US housing market remains a critical barometer of economic health. November’s Existing Home Sales at 4.10 million units mark a 1.20% increase month-over-month (MoM) and a 2.30% decline year-over-year (YoY) from 4.20 million in November 2024. This modest uptick follows a soft patch in mid-2025, where sales dipped below 4 million units in July. The geographic distribution shows stronger activity in the South and West regions, while the Northeast lags due to higher mortgage rates and inventory constraints.

Drivers this month

• Lower mortgage rates averaging 6.20% in November, down from 6.50% in October, easing affordability pressures.
• Seasonal demand pickup ahead of year-end, especially in suburban markets.
• Inventory remains tight at 1.80 months supply, sustaining price levels and seller confidence.

Policy pulse

The Federal Reserve’s recent pause in rate hikes has stabilized borrowing costs. The 6.20% average mortgage rate is below the 6.80% peak seen in Q2 2025, aligning with the Fed’s inflation target of 2%. This pause supports housing demand without overheating the market.

Market lens

Following the release, the US dollar index (DXY) weakened slightly by 0.10%, reflecting softer safe-haven demand. Treasury yields on the 10-year note edged down 5 basis points, signaling moderate risk appetite. The S&P 500 futures rose 0.30%, indicating positive sentiment toward consumer sectors.

Existing Home Sales are closely tied to core macroeconomic indicators such as employment, inflation, and consumer confidence. November’s 4.10 million units contrast with the 12-month average of 4.05 million, suggesting a stabilization after a volatile 2025. The US unemployment rate remains low at 3.70%, supporting household income and mortgage eligibility. Meanwhile, inflation has moderated to 3.10% YoY, down from 4.20% in early 2025, easing cost pressures on buyers.

Drivers this month

• Steady job growth with 210,000 new jobs added in October 2025.
• Consumer confidence index at 102, slightly above the 100 baseline, encouraging spending.
• Moderate inflation reducing input costs for homebuilders, aiding supply.

Policy pulse

Fiscal policy remains neutral with no major stimulus or tax changes impacting housing directly. The government budget deficit narrowed to 3.80% of GDP, reducing pressure on bond markets and interest rates.

Market lens

Mortgage-backed securities (MBS) spreads tightened by 3 basis points post-release, reflecting improved investor confidence in housing credit risk. The red SPX index showed a mild rally, driven by real estate and consumer discretionary sectors.

Drivers this month

• Mortgage rates easing from 6.50% to 6.20%.
• Inventory constraints maintaining price support.
• Seasonal buying ahead of year-end holidays.

Policy pulse

The Fed’s rate pause has helped stabilize mortgage rates, preventing further sales declines. Inflation moderation supports real income growth, indirectly boosting housing demand.

Market lens

Immediate reaction: EUR/USD rose 0.15% as US data showed moderate strength, easing fears of aggressive Fed tightening. The red EURUSD pair reflected this sentiment shift.

Looking ahead, Existing Home Sales face a mix of supportive and challenging factors. The base case scenario (60% probability) expects sales to hold near 4.10 million units in Q1 2026, supported by stable mortgage rates and steady employment. A bullish scenario (20%) sees sales rising above 4.30 million if inflation continues to ease and fiscal stimulus returns. Conversely, a bearish scenario (20%) projects a decline below 3.90 million if rates rise due to inflation surprises or geopolitical shocks.

Drivers this month

• Potential Fed rate hikes if inflation rebounds.
• Supply chain improvements easing construction costs.
• Consumer sentiment sensitive to labor market shifts.

Policy pulse

Monetary policy remains the key risk factor. The Fed’s communication suggests patience, but any hawkish pivot could pressure mortgage rates and dampen sales. Fiscal policy is unlikely to provide significant stimulus in the near term.

Market lens

Bond markets are pricing a 30% chance of rate hikes in 2026, which could tighten financial conditions. The red TSLA stock, sensitive to consumer credit conditions, may reflect housing market shifts in coming quarters.

November’s Existing Home Sales data from the Sigmanomics database points to a cautiously optimistic housing market. While sales have rebounded modestly, affordability and inventory remain key constraints. Monetary policy’s trajectory will be decisive, with the Fed’s pause providing temporary relief. External risks, including geopolitical tensions and inflation volatility, could disrupt this fragile balance. Investors and policymakers should monitor housing closely as a leading indicator of consumer health and economic momentum.

Key Markets Likely to React to Existing Home Sales

The housing market’s health influences a range of tradable assets. The red SPX index tracks consumer confidence and discretionary spending linked to home sales. The red TSLA stock is sensitive to credit conditions affecting auto and home purchases. The red EURUSD currency pair often reacts to US monetary policy shifts driven by housing data. The red USDCAD reflects commodity-linked economic cycles that influence housing demand. Lastly, the red BTCUSD crypto pair sometimes moves inversely to traditional assets amid risk-on/risk-off shifts triggered by housing market surprises.

FAQs

What is the significance of US Existing Home Sales data?

US Existing Home Sales measure the monthly volume of previously owned homes sold, reflecting consumer demand and economic health.

How does monetary policy affect home sales?

Monetary policy influences mortgage rates, which directly impact housing affordability and buyer activity.

What are the risks to the housing market outlook?

Risks include rising interest rates, inflation surprises, geopolitical tensions, and supply chain disruptions affecting construction.

Takeaway: The November 2025 Existing Home Sales report signals a tentative recovery, but future momentum hinges on stable monetary policy and manageable inflation.