Existing Home Sales Break 29 month Streak of Year-Over-Year Gains

Existing home sales in November failed to outdo those in the same month arnyear earlier for the first time in 29 months. rnThe National Association of Realtors® (NAR) said today that existingrnsingle-family homes, condominiums, townhomes, and cooperative apartments soldrnat a seasonally adjusted annual rate of 4.90 million units during the month, arn4.2 percent drop from October’s rate of 5.12 million and 1.2 percent below the Novemberrn2012 sales pace of 4.96 million.</p

Completed sales of single-family homes were down 3.8 percent to a seasonallyrnadjusted annual rate of 4.32 million in November from 4.49 million in October,rnand were 0.9 percent below the 4.36 million-unit level in November 2012.  Existing condominium and co-op sales droppedrn7.9 percent to an annual rate of 580,000 units in November from 630,000 unitsrnin October, and were 3.3 percent lower than the 600,000-unit pace a year ago.</p

Despite declining sales, prices continued to rise, at least when viewed year-over-year.  The national median price for all categoriesrnof housing was $196,300 in November, 9.4 percent higher than a yearrnearlier.  The median single-family homernprice was $196,200 and the median condo price was $197,400, reflecting annualrnincreases of 9.4 percent and 10.0 percent respectively.</p

EXISTING HOME SALES
</p

Click and drag to zoom charts.</p

ChartManager.loadChart(‘ehschart’, ‘ExistingHomeSalesChart’,{showBands:true});

</p

Lawrence Yun, NAR chief economist, said the market is being squeezed. “Homernsales are hurt by higher mortgage interest rates, constrained inventory and continuingrntight credit,” he said. “There is a pent-up demand for both rental andrnowner-occupied housing as household formation will inevitably burst out, butrnthe bottleneck is in limited housing supply, due to the slow recovery in newrnhome construction. As such, rents are rising at the fastest pace in five years,rnwhile annual home prices are rising at the highest rate in eight years.”</p

To Yun’s point about housing supply, total inventory declined 0.9 percent inrnNovember to 2.09 million existing homes available for sale.  Due to the declining sales rate thisrnrepresented a 5.1-month supply at the current sales pace, compared with 4.9rnmonths in October.  In November 2012 therernwas a 4.8-month supply.</p

Short sales accounted for 5 percent of the homes sold in November andrnforeclosure sales for 9 percent.  Shortrnsales sold at an average discount of 13 percent and foreclosures 17rnpercent.  The aggregate 14 percentrndistressed home share of sales was the same as in October but down from 22rnpercent in November 2012, partially accounting for the increasing prices.  </p

First-time buyers accounted for 28 percent of purchases in November,rnunchanged from October and down 2 percentage points from the previousrnNovember.  Investors accounted for 19 percentrnof purchases and seven out of ten of them paid cash for their purchases, thusrnaccounting for many of the 32 percent of sales that were all cash. </p

The median time on market for all homes was 56 days in November, up from 54rndays in October, but well below the 70 days of marketing time required a yearrnearlier.  Short sales were on the marketrnfor a median of 120 days, while foreclosures typically sold in 59 days, andrnnon-distressed homes took 55 days. Thirty-five percent of homes sold inrnNovember were on the market for less than a month.</p

NAR President Steve Brown noted that new rules defining the QualifiedrnMortgage will be going into effect soon.  “New underwriting rules tornprotect borrowers, effective in January, will prohibit many loan features, setrntighter limits on the amount of debt a borrower can have and still get arnmortgage, and require that lenders accurately measure a borrower’s ability tornrepay.</p

“This means that qualified borrowers are getting a loan that they are veryrnlikely to be able to repay, but some borrowers may wind up paying much more forrntheir mortgage, or not get a loan at all due to the tougher standards,” he said.rn”The new rules may tighten credit too much, but we’re hopeful regulators willrnmake adjustments if this proves to be true.”</p

Regionally, existing-home sales in the Northeast declined 3.0 percent to anrnannual rate of 650,000 in November, but are 6.6 percent above November 2012.rnThe median price in the Northeast was $242,900, up 5.7 percent from a year ago.</p

Existing-home sales in the Midwest fell 4.1 percent in November to a 1.17rnmillion annual pace, but are unchanged from a year ago. The median price in thernMidwest was $151,100, 6.7 percent higher than in November 2012.</p

In the South, existing-home sales declined 2.4 percent to an annual level ofrn2.01 million in November, but are 1.0 percent above November 2012. The medianrnprice in the South was $168,700, a 7.7 percent annual increase. </p

Sales in the West dropped 8.5 percent to a pace of 1.07 million in November,rnand are 10.1 percent below a year ago, in part from constrained inventoryrnconditions. The median price in the West was $284,400, up 16.5 percent fromrnNovember 2012.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.