Existing home sales rose in November, ushering the housing market into its second consecutive month of increases, according to the latest report from the National Association of Realtors.
Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.9% from October to a seasonally adjusted rate of 5.32 million in November. Nevertheless, the report indicates sales are 7% below November 2017's rate.
NAR Chief Economist Lawrence Yun said two consecutive months of increases is a welcomed sign for the market.
“The market conditions in November were mixed, with good signs of stabilizing home sales compared to recent months, though down significantly from one year ago,” Yun said. “Rising inventory is clearly taming home price appreciation.”
The median existing home price for all housing types increased to $257,700, climbing 4.2% from last November 2017’s rate of $247,000. This marks the 81st straight month of year-over-year gains.
Total housing available for sale declined from October, falling from 1.85 million existing homes on the market to 1.74 million in November. Fortunately, this is still up from last year’s total of 1.67 million.
Unsold inventory rests at a 3.9-month supply at the current sales pace, retreating from last month’s total of 4.3. The total was 3.5 months a year ago at this time.
“A marked shift is occurring in the West region, with much lower sales and very soft price growth,” Yun continued. “It is also the West region where consumers have expressed the weakest sentiment about home buying, largely due to lack of affordable housing inventory.”
Properties stayed on the market an average of 42 days in October, moving up from 36 days in October and 40 days in 2017. The report states that 43% of homes stayed on the market for less than a month.
It is not surprising to see homes remain on the market a little longer,” NAR President John Smaby said. “Buyers can often negotiate a more favorable price in those circumstances, especially when paired with a motivated seller and the aid of a Realtor familiar with their local market.”
The report states, the average commitment rate for a 30-year, conventional, fixed-rate mortgage climbed from 4.83% the month prior to 4.87% in November and the average commitment rate for all of 2017 remained at 3.99%, according to Freddie Mac.
First-time buyers comprised 33% of sales in November, an increase from 31% in October and 29% in November of last year. NAR revealed that the annual share of first-time buyers held steady at 33%.
“Inventory is plentiful on the upper-end, but a mismatch between supply and demand exists at affordable price points,” Yun said. “Therefore, facilitating real estate development of affordable housing units in designated Opportunity Zones can provide better housing access in addition to boosting the local economy.”
Single-family homes rose from a seasonally adjusted annual rate of 4.62 million in October to 4.71 million in November 6.7% below 5.05 million a year ago. The median existing single-family home price was $260,500 in November, increasing 5% from November 2017.
Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 610,000 units in November, moving forwards 1.7% from October, but still down 9% from a year ago. The median existing condo price was $236,400 in November, falling 1.3% from 2017.
Existing home sales in the Northeast climbed 7.2% to an annual rate of 740,000 in November, which is a 2.6% below a year ago. The median price in the Northeast increased 6.5% from November 2017 and came in at 291,400.
In the Midwest, existing-home sales increased from the prior month at an annual rate of 1.34 million and 5.5% above November 2017. The median price in the Midwest was $199,100, increasing 2.6% from this time last year.
Southern existing-home sales also moved forward, increasing 2.3% to an annual rate of 2.20 million in November. This is down 5.6% from last year, however the median price in the South rose to 223,600, increasing 3.2% from November 2017.
Existing home sales in the West fell 6.3%% to an annual rate of 1.04 million in November, which is a whopping 15.4% below November 2017. The median price in the West was $380,600 increasing 1.8% from this time last year.
TIAA Bank Executive Vice President John Pataky said this report signals that homebuyers see an opportunity in the existing home market, despite the steady flow of uncertain housing data we’ve seen this year.
“Urban markets are full of existing homes, and these continue to remain popular among new home buyers, potentially boosting the numbers. Pricing trends can play into this as well – as first-time buyers see higher prices for new homes, existing homes remain a more affordable and accessible option," Pataky said. "Buyers are also feeling the pressure of locking in a fixed rate as soon as they can, with anxiety that mortgage rates might keep rising. Whether rates continue the steady rise they experienced in 2018, or moderate somewhat, will be crucial to determining the market’s fate in 2019.”