WASHINGTON — A big surge in the Northeast and a smaller gain in the South pushed existing-home sales up in November for the third consecutive month, according to the National Association of Realtors.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 0.7% to a seasonally adjusted annual rate of 5.61 million in November from a downwardly revised 5.57 million in October. November’s sales pace is now the highest since February 2007 (5.79 million) and is 15.4% higher than a year ago (4.86 million).
Lawrence Yun, NAR chief economist, says it’s been an outstanding three-month stretch for the housing market as 2016 nears the finish line. “The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,” he said. “Furthermore, it’s no coincidence that home shoppers in the Northeast – where price growth has been tame all year – had the most success last month.”
The median existing-home price for all housing types in November was $234,900, up 6.8% from November 2015 ($220,000). November’s price increase marks the 57th consecutive month of year-over-year gains.
Total housing inventory at the end of November dropped 8.0% to 1.85 million existing homes available for sale, and is now 9.3% lower than a year ago (2.04 million) and has fallen year-over-year for 18 straight months. Unsold inventory is at a 4.0-month supply at the current sales pace, which is down from 4.3 months in October.
“Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017,” added Yun. “Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage leaped to 3.77% in November from 3.47% in October (highest rate since January at 3.87%). The average commitment rate for all of 2015 was 3.85%.
First-time buyers were 32% of sales in November, which is down from 33% in October but up from and 30% a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in November – revealed that the annual share of first-time buyers was 35% (32% in 2015), which is the highest since 2013 (38%).
“First-time buyers in higher priced cities will be most affected by rising prices and mortgage rates next year and will likely have to stretch their budget or make compromises on home size, price or location,” said Yun.
Properties typically stayed on the market for 43 days in November, up from 41 days in October but down considerably from a year ago (54 days). Short sales were on the market the longest at a median of 110 days in November, while foreclosures sold in 55 days and non-distressed homes took 41 days. Forty-two percent of homes sold in November were on the market for less than a month.
NAR President William E. Brown, a Realtor from Alamo, California, says consumers looking to buy in 2017 should find a Realtor, seek a preapproval from a lender and start their home search now. “It’s never too early to begin viewing listings online and in person with a Realtor to identify what’s available within the budget and where,” said Brown. “There are fewer available homes during the winter months but also fewer buyers. With mortgage rates and prices expected to increase as the year goes on, the first few months of 2017 could be an opportune time close on a home.”
Inventory data from Realtor.com reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in November were Billings, Mont., 23 days; San Jose-Sunnyvale-Santa Clara, Calif., 41 days; San Francisco-Oakland-Hayward, Calif., 42 days; Nashville-Davidson-Murfreesboro-Franklin, Tenn., 45 days; and Provo-Orem, Utah, at 46 days.
All-cash sales were 21% of transactions in November, down from 22% in October and 27% a year ago. Individual investors, who account for many cash sales, purchased 12% of homes in November, down from 13% in October and 16% a year ago. Fifty-eight percent of investors paid in cash in November, which matches the lowest share since August 2009.
Distressed sales – foreclosures and short sales – rose to 6% in November, up from 5% in October but down from 9% a year ago. Four% of November sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 17% below market value in November (18% in October), while short sales were discounted 16% (unchanged from October).
Single-family and Condo/Co-op Sales
Single-family home sales declined 0.4% to a seasonally adjusted annual rate of 4.95 million in November from 4.97 million in October, but are still 16.2% above the 4.26 million pace a year ago. The median existing single-family home price was $236,500 in November, up 6.8% from November 2015.
Existing condominium and co-op sales jumped 10.0% to a seasonally adjusted annual rate of 660,000 units in November, and are now 10.0% above a year ago. The median existing condo price was $222,600 in November, which is 5.8% above a year ago.
November existing-home sales in the Northeast hiked 8.0% to an annual rate of 810,000, and are now 15.7% above a year ago. The median price in the Northeast was $263,000, which is 3.3% above November 2015.
In the Midwest, existing-home sales decreased 2.2% to an annual rate of 1.33 million in November, but are still 18.8% above a year ago. The median price in the Midwest was $180,300, up 6.5% from a year ago.
Existing-home sales in the South in November rose 1.4% to an annual rate of 2.22 million, and are now 11.6% above November 2015. The median price in the South was $206,900, up 9.2% from a year ago.
Existing-home sales in the West declined 1.6% to an annual rate of 1.25 million in November, but are still 19.0% higher than a year ago. The median price in the West was $345,400, up 8.5% from November 2015.
Source: National Association of Realtors