November home sales
Resale home sales rose four percent in November and are up 12.2 percent from November 2010, according to the National Association of Realtors. According to Freddie Mac, the fixed-rate mortgage fell below the historic four percent mark again in November from 4.07 percent in October and 4.30 percent in November 2010.
As in past month, the NAR reports that contract failures continue to daunt sales with 33 percent of NAR members reporting contract failures in November, up drastically from October 2010 when contract failures were only reported by 9 percent of members. The trade group said in a statement, “Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including lower conforming mortgage loan limits, home inspections and employment losses.”
Housing inventory fell 5.8 percent in November to a 7.0 month supply. ““Since setting a record of 4.04 million in July 2007, inventories have trended down and supplies are moving close to price stabilization levels,” NAR Chief Economist, Lawrence Yun said.
The national median price of a resale home fell 3.5 percent year-over-year to $164,200, as distressed homes accounted for one in three sales in November. All cash sales accounted for 28 percent of purchases in November, primarily made up of investors who purchased 19 percent of all homes sold in November. First time buyers account for 35 percent of sales in November, up one percent from October and three percent over the year.
Single family homes rose 4.5 percent from October and are up 12.9 percent from November 2010. Existing condominium and co-op sales were unchanged for the month but are up 6.8 percent from November 2010.
Regional performance varied
- Home sales in the Northeast rose 9.8 percent for the month and are up 7.7 percent from November 2010 with a median price of $240,200, down 0.1 percent from a year ago.
- Home sales in the Midwest rose 4.3 percent for the month and are up 15.7 percent from November 2010 with a median price of $133,400, down 4.0 percent from a year ago.
- Home sales in the South rose 2.4 percent for the month and are up 12.3 percent from November 2010 with a median price of $143,300, down 2.1 percent from a year ago.
- Home sales in the West rose 3.6 percent for the month and are up 11.5 percent from November 2010 with a median price of $195,300, down 8.4 percent from a year ago.
NAR weighs in
Lawrence Yun, NAR chief economist, said more people are taking advantage of the buyer’s market. “Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing,” he said. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”
NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said housing affordability conditions have set a new record high. “With record low mortgage interest rates and bargain home prices, NAR’s housing affordability index shows that a median-income family can easily afford a median-priced home,” he said.
“With consumer price inflation rising by more than 3 percent this year, consumers are looking to lock-in steady payments by taking out long-term fixed-rate mortgages. However, the problem remains that some financially qualified families who are willing to stay well within their means are being denied the opportunity to buy in today’s market by the overly restrictive mortgage underwriting situation,” Veissi said.
