Real Estate

Lack of housing supply sends home sales retreating in November

November's sales are still 2.7% above last year's rate

The nation’s existing-home sales declined 1.7% in November, according to the National Association of Realtors.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums, and co-ops – fell to a seasonally adjusted annualized rate of 5.35 million. However, sales are still 2.7% above November 2018’s rate.

Lawrence Yun, NAR’s chief economist said, although America’s economy is performing well, home sales are bound to be choppy if inventory levels remain low.

“The new home construction seems to be coming to the market, but we are still not seeing the amount of construction needed to solve the housing shortage,” Yun said. “It is time for builders to be innovative and creative, possibly incorporating more factory-made modules to make houses affordable rather than building homes all on-site.”

In November, the median price for an existing home was $271,300, a gain of 5.4% from last year’s rate of $257,400. This marks the 93rd straight month of year-over-year gains.

According to NAR, total homes available for sale came in at 1.64 million, down 7.3% from October and 5.7% from last year’s rate of 1.74 million.

There was a 3.7-month supply of unsold inventory at the current sales pace, down from 3.9 in October and 4 year ago. Properties stayed on the market an average of 38 days in November, rising from 36 days in October but down from 42 days last year. The report states that 45% of homes stayed on the market for less than a month.

The average commitment rate for a 30-year, conventional, fixed-rate mortgage increased from 3.69% in October to 3.7% in November and the average commitment rate for all of 2018 was 4.54%, according to Freddie Mac.

First-time buyers comprised 32% of sales in November, slightly up from October’s rate of 31%, but down from November 2018’s rate of 33%. NAR revealed that the annual share of first-time buyers held steady at 33%.

Single-family home sales fell from a seasonally adjusted annual rate of 4.85 million in October to 4.79 million in November, which is 5.4% above a year ago. The median existing single-family home price was $274,000 in November, increasing 5.4% from last year’s rate. 

Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 560,000 units in November, which is down 5.1%. from October’s rate and 3.4% lower than a year ago. The median existing condo price was $248,200 in Novembe, rising 4.5% from 2018. 

Here’s a regional breakdown of the nation’s existing-home sales:

  • Existing-home sales in the Northeast grew 1.4% from the prior month’s rate to an annual rate of 700,000, which is down 1.4% from a year ago. The median price in the Northeast increased by 3.9% from November 2018 and came in at $301,700.
  • In the Midwest, existing-home sales grew at the strongest from the previous month at 2.3%, coming in at an annual rate of 1.32 million, which is up 1.5% from November 2018’s level. The median price in the Midwest was $209,700, increasing 5.9% from a year ago.
  • Southern existing home sales fell 3.9% to an annual rate of 2.24 million in November, up 3.7% from last year. The median price in the South climbed to $234,400, growing 4.8% from November 2018.
  • Existing-home sales in the West decreased by 3.5% to an annual rate of 1.09 million in November, which is 4.8% above last year’s rate. The median price in the West was $410,700, increasing 7.1% from this time last year.

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