NAR encouraged by rising existing home sales
Existing-home sales rose 5.6% in November, after bottoming in July, according to the National Association of Realtors. The figure, which includes completed transactions of single-family, townhomes, condominiums and co-ops, rose to a seasonally adjusted annual rate of 4.68 million in November, up from 4.43 million in October. Sales were 27.9% below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time homebuyer tax credit. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” said Lawrence Yun, NAR chief economist. Affordability is helping, he said. “The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970,” he said. “The market is recovering and we should trend up to a healthy, sustainable level in 2011.” Pricing was flat on a national level. The median existing-home price for all housing types was $170,600 in November, up just 0.4% from November 2009. Distressed homes accounted for 33% of sales in November; the same as the year-ago period. Foreclosures, which accounted for two-thirds of the distressed sales share, sold at a median discount of 15% in November, while short sales were discounted 10% in comparison with traditional home sales. Total housing inventory fell 4% to 3.71 million existing homes available for sale — a 9.5-month supply at the current sales pace, down from a 10.5-month supply in October. A parallel NAR practitioner survey shows first-time buyers purchased 32% of homes in November, the same as in October, but below a 51% share in November 2009 from the surge to beat the initial deadline for the first-time homebuyer tax credit. Investors accounted for 19% of transactions in November, unchanged from October, but up from 12% in November 2009. All-cash sales were at 31% in November, up from 19% a year ago, a reflection of tight credit conditions. Single-family home sales rose 6.7% to a seasonally adjusted annual rate of 4.15 million in November from 3.89 million in October, but 27.3% below a 5.71 million cyclical peak in November 2009. The median existing single-family home price was $171,300, up 1.2% over a year ago. Existing condominium and co-op sales declined 1.9% to a seasonally adjusted annual rate of 530,000 in November from 540,000 in October. Sales were 32.2% below the year-ago figure. Write to Kerry Curry.