Existing home sales in November tumbled 6.1%, the biggest drop since July 2010, down to a seasonally adjusted annual rate of 4.93 million.
This was well below analyst expectations of a 1.1% decline, ending five months of 5 million SAAR sales.
It wasn’t weather – analysts noted that the November weather was mild and should have given a boost to sales.
“While the headlines often point to first-time buyers’ reluctance to enter the market as a catalyst to the sluggish housing recovery, today’s report shows inventory needs to climb before it can support more interested buyers,” Quicken Loans Vice President Bill Banfield said. “As homeowners gain trust in the economy, they will be more comfortable leaving their current mortgage and entering the market, thus driving up inventory to support further demand.”
November's weakness is broad based, with all four regions showing single-digit monthly declines.
Lawrence Yun, chief economist for the National Association of Realtors, blamed the stock market.
“The stock market swings in October may have impacted some consumers’ psyche and therefore led to fewer November closings,” Yun said. “Furthermore, rising home values are causing more investors to retreat from the market.”
It's a cinch that Realtors are hoping the new 97% LTV from Fannie will rescue housing.
Lower prices don't seem to be giving a boost to sales. The median fell for a 5th straight month, down 1.1% in November to $205,300.
Year-on-year the median price, where growth had been in the double digits through most of last year, is up 5.5%, holding in the mid-single-digit area where it's been since March.
Lower mortgage rates, now below 4% for some 30-year fixed loans, are another factor not driving up sales.
New home sales, which have been even flatter than existing home sales, will be posted tomorrow.
November existing-home sales in the Northeast declined 4.2% to an annual rate of 680,000, but are still 4.6% above a year ago. The median price in the Northeast was $246,100, which is 1.3% above a year ago.
In the Midwest, existing-home sales fell 8.9% to an annual level of 1.13 million in November, and are now 1.7% below November 2013. The median price in the Midwest was $160,500, up 7% from a year ago.
Existing-home sales in the South decreased 3.2% to an annual rate of 2.09 million in November, but remain 5.0% above November 2013. The median price in the South was $176,500, up 5.2% from a year ago.
Existing-home sales in the West dropped 9.6% to an annual rate of 1.03 million in November, and remain 1% below a year ago. The median price in the West was $292,700, which is 3.5% above November 2013.