NAR: Existing sales increase for second consecutive month
WASHINGTON – Dec. 19, 2018 – Existing-home sales increased in November, according to the National Association of Realtors® (NAR), marking two consecutive months of increases. Three of four major U.S. regions saw gains in sales activity last month.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – increased 1.9 percent from October to a seasonally adjusted rate of 5.32 million in November. Sales are now down 7.0 percent from a year ago (5.72 million in November 2017).
Lawrence Yun, NAR's chief economist, says 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. Rising inventory is clearly taming home price appreciation."
The median existing-home price for all housing types in November was $257,700, up 4.2 percent from November 2017 ($247,200). November's price increase marks the 81st straight month of year-over-year gains.
Total housing inventory at the end of November decreased to 1.74 million, down from 1.85 million existing homes available for sale in October – that's an increase from 1.67 million a year ago, however. Unsold inventory is at a 3.9-month supply at the current sales pace, down from 4.3 last month and up from 3.5 a year ago.
"A marked shift is occurring in the West region, with much lower sales and very soft price growth," says Yun. "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 typically stayed on the market for 42 days in November, up from 36 days in October and 40 days a year ago – 43 percent of homes sold in November were on the market for less than a month.
"It is not surprising to see homes remain on the market a little longer," says NAR President John Smaby. "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."
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 4.87 percent in November from 4.83 percent in October. The average commitment rate for all of 2017 was 3.99 percent.
First-time buyers were responsible for 33 percent of sales in November, up from last month and a year ago (31 percent and 29 percent, respectively). NAR's 2018 Profile of Home Buyers and Sellers – released in late 2018 – found that the annual share of first-time buyers was 33 percent.
"Inventory is plentiful on the upper-end, but a mismatch between supply and demand exists at affordable price points," Yun adds. "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."
Distressed sales – foreclosures and short sales – represented 2 percent of sales in November (the lowest since NAR began tracking in October 2008), down from 3 percent last month and down from 4 percent a year ago.
All-cash sales accounted for 21 percent of transactions in November, down from October and a year ago (23 and 22 percent, respectively). Individual investors, who account for many cash sales, purchased 13 percent of homes in November, down from October and a year ago (15 percent and 14 percent, respectively).
Single-family and condo/co-op sales
Single-family home sales sit at a seasonally adjusted annual rate of 4.71 million in November – up from 4.62 million in October, but are 6.7 percent below the 5.05 million sales pace from a year ago. The median existing single-family home price was $260,500 in November, up 5.0 percent from November 2017.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 610,000 units in November, up 1.7 percent from last month but down 9.0 percent from a year ago. The median existing condo price was $236,400 in November, which is down 1.3 percent from a year ago.
November existing-home sales in the Northeast increased 7.2 percent to an annual rate of 740,000, 2.6 percent below a year ago. The median price in the Northeast was $291,400, up 6.5 percent from November 2017.
In the Midwest, existing-home sales rose 5.5 percent from last month to an annual rate of 1.34 million in November, down 4.3 percent from a year ago. The median price in the Midwest was $199,100, up 2.6 percent from last year.
Existing-home sales in the South grew 2.3 percent to an annual rate of 2.20 million in November, down 5.6 percent from last year. The median price in the South was $223,600, up 3.2 percent from a year ago.
Existing-home sales in the West declined 6.3 percent to an annual rate of 1.04 million in November, 15.4 percent below a year ago. The median price in the West was $380,600 up 1.8 percent from November 2017. © 2018 Florida Realtors®
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