Existing home sales on the rise
Fourth quarter headwinds are always a force to be reckoned with when it comes to home sales, but this month was an exception. According to the National Association of Realtors, existing home sales (contracts signed) in November rose 0.7 percent, marking the third consecutive month of improvement.
Economists had forecasts that sales would dip 1.8 percent (per Bloomberg), despite housing starts rising in the latter part of the year.
November marks the highest sales pace since February 2007 and is 15.4 percent higher than a year ago.
Surge in sales up North
Dr. Lawrence Yun, NAR chief economist, says it’s been an outstanding three-month stretch for the housing market as 2016 nears the finish line.
“The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,” he said. “Furthermore, it’s no coincidence that home shoppers in the Northeast – where price growth has been tame all year – had the most success last month.”
Median home prices rising
The median existing home price in November rose 6.8 percent over the last year to $234,900, marking the 57th consecutive month of year-over-year gains.
Inventory fell 8.0 percent to 1.85 million existing homes available for sale, and is now 9.3 percent lower than a year ago. Inventory remains tight, falling year-over-year for the last 18 consecutive months.
“Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017,” added Yun. “Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country.”
Fewer first time buyers
One negative sign in the NAR report is that first time buyers accounted for 32 percent of sales in November, down from 33 percent in October. That said, it is up 2.0 percent compared to November of last year.
“First-time buyers in higher priced cities will be most affected by rising prices and mortgage rates next year and will likely have to stretch their budget or make compromises on home size, price or location,” said Yun.
Properties typically stayed on the market for 43 days in November, up from 41 days in October but down considerably from a year ago (54 days). Further, a whopping 42 percent of homes sold in November were on the market for less than a month.
Northeast is killin’ it!
In the Northeast, sales rose an impressive 8.0 percent, up 15.7 percent above November 2015. The median price in the Northeast was $263,000, which is 3.3 percent above November 2015.
The South saw an increase as well, rising 1.4 percent, marking an 11.6 percent increase above a year ago. The median price rose 9.2 percent over the last year to $206,900
Existing-home sales in the West declined 1.6 percent, but are 19.0 percent above last year. The median price hit $345,400, up 8.5 percent from November 2015.
In the Midwest, existing-home sales decreased 2.2 percent to an annual rate of 1.33 million in November, but are still 18.8 percent above a year ago. The median price in the Midwest was $180,300, up 6.5 percent from a year ago.