Existing-home sales and prices continue upward trend

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Existing home sales continued to improve [3]in November as lower inventory levels eased pricing pressures across the housing market.

November also brought the highest sales level on record since 2009 when homes sold at a pace of 5.44 million units, the National Association of Realtors said in a report Thursday.

Comparatively, existing home sales today are up 5.9% to a seasonally adjusted annual rate of 5.04 million units in November when compared to 4.76 million unit sales in October. From last year, existing sales also rose 14.5%. NAR's existing home sales report measures all completed transitions on single-family homes, townhomes, condos and co-ops.

Home prices also maintained an upward trajectory in recent months, according to data from the Federal Housing Finance Agency's October report.

U.S. home prices edged up 0.5% on a seasonally adjusted basis from September to October, FHFA said. Overall, prices rose 5.6% for the twelve-month period ending in October, the agency's Home Price Index reported.

Both reports show continued improvement in the housing industry heading into 2013.

"Momentum continues to build in the housing market from growing jobs and a bursting out of household formation," said NAR Chief Economist Lawrence Yun.

He added, "With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying homes. Areas impacted by Hurricane Sandy show storm-related disruptions but overall activity in the Northeast is up, offset by gains in unaffected areas." 

The current FHFA Home Price Index is 15.7% below its April 2007 peak and nearly equal to the pre-crisis index level set in July 2004.

For the nine census divisions, seasonally adjusted monthly price changes from September to October varied with prices falling 1.3% in the Middle Atlantic division and increasing 2% in the Pacific division. Prices in New England fell a slight 0.1%, while home values in the Mountain region grew 13.1%.

The national median existing-home price for all housing types was $180,600 in November, up 10.1% from a year earlier and the ninth consecutive month of gains. It's been well over six years since the market has experience nine consecutive months of home price gains.

Distressed homes [4] – which account for foreclosures and short sales – accounted for 22% of all November sales, with 12% being foreclosures and 10% short sales. The number of total distressed sales declined 24% from last month and fell 29% from last year. 

"The market share of distressed property sales will fall into the teens next year based on a diminishing number of seriously delinquent mortgages," NAR's Yun said.

The median time on the market for all homes was 70 days in November, slightly below 71 days from last month and a steep drop from 98 days a year earlier.

First-time buyers accounted for 30% of purchases, down from 31% last month and a 35% drop from last year.

Regionally, existing-home sales rose 7.9% in the South to an annual level of 2.04 million in November, up 17.2% from a year ago.

Existing-home sales grew the least amount, or 0.8%, in the West as a result of inventory constraints. Still, the region's sales pace hit 1.19 million units in November, up 4.4% from November of 2011.

cmlynski@housingwire.com [5]