Much like poetry and songwriting, it exists for the sake of invoking an emotion or presenting an idea or ideology, and does so in a way incorporating both structure and freedom. There are also aspects of a novel that are also distinctly artistic, such as the effects certain words have on pacing, and the emotional attachment or detachment that comes from the choices such as 1st or 3rd person.
The job of art is to move, inspire us, and make us reflect. This can be achieved with music, images, song, dance, sculpture, architecture, theatre, poetry, or literary fiction.
Anyone who thinks writing a story is simply spitting words and incidents onto a page has never written a good story. The art of fiction resides in making characters sympathetic, passionate and insightful; in making incidents challenge and transform them; in exploring their desperate struggle to escape misery, and the sacrifices and transformations they incur to do so. And in decorating characters, setting and language with images and sounds that enhance our appreciation of these things.
The best explorations require enormous compassion, observation and insight in a writer, plus great facility with imagery and language; and takes years to develop. A novelist has a writer's eye, every bit as much as a painter has an artist's eye.
So sure... A novel is -- or can be -- art.
Not all novels are great. However 50,000 words dedicated to a story is a form of art. It may not necessarily be the best art but it is art nonetheless. Many novels will go down in history as majorly unread but all of them have some form of heart and soul.