Sales of existing homes fell in November, disappointing economists’ modest expectations for the month.
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The National Association of Realtors reported Monday that existing home sales fell 6.1 percent in November to an annual rate of 4.93 million, adjusted for seasonal variation. Sales had been at a 5.25 million rate the month before.
Although sales are still up, by 2.1 percent from a year ago, November’s report is a disappointment, especially for a year that has seen much lower than expected interest rates on mortgages.
“Fewer people bought homes last month despite interest rates being at their lowest levels of the year,” NAR chief economist Lawrence Yun said.
“The stock market swings in October may have impacted some consumers’ psyche and therefore led to fewer November closings Furthermore, rising home values are causing more investors to retreat from the market,” Yun added.
The median price of homes sold was up 5 percent annually to $205,300, according to NAR.
One positive note in Monday’s report is that the share of first-time homebuyers rose to 31 percent, the highest in two years. That uptick could represent the entrance of new demand for housing into the market.
Similarly, short sales and sales of foreclosures held steady in the month and are down from 14 percent of all sales to 9 percent over the course of the year. That decline represents the waning effects of the housing crisis.
The supply of homes for sale, however, fell 6.7 percent to 2.09 million. That represents a 5.1-month supply. Although inventory is up on the year, Yun warned that it would need to increase rapidly in order to accommodate demand over the next year without stoking rapid price increase.
“Much faster price and rent appreciation — easily exceeding wage growth — will occur next year unless new construction picks up measurably,” Yun said.
Monday’s data on existing home sales complements other housing market data that shows relatively steady but weak growth in the housing market. Sales of new homes have been essentially flat over the year, as reported by the Census Bureau. Construction on new units has also been tepid.
