November was not the most stellar of months for existing-home sales, with a number of factors impacting the famed housing statistic.
Existing-home sales declined by both monthly and yearly measures in November, according to the latest analysis by the National Association of Realtors.
From October to November, sales declined 4.3 percent to a seasonally adjusted annual rate of 4.90 million, while year-over-year sales were down 1.2 percent; that’s the first time in 29 months that sales dropped by yearly measures.
NAR’s Existing-Home Sales Report
Other notable stats from NAR’s report included:
- The median existing-home price actually grew in November, increasing 9.4 percent from last year. That increase was due to two things: one, housing inventory remains low at a 5.1-months supply; and two, distressed sales made up just 14 percent of November sales (down from 22 percent last year).
- Though median time on market creeped up by two days from October to November to 56 days, it was still down from 70 days in Nov. 2012; meanwhile, 35 percent of homes sold were on the market for less than a month.
- The share of first-time homebuyers remained historically small at 28 percent (that’s actually down from 30 percent a year ago).
- All-cash sales were consistent, making up 32 percent of all transactions; that’s up from 31 percent in October and from 30 percent in Nov. 2012.
- Interestingly, condo/co-op sales fell more than single-family home sales, dropping 7.9 percent to single family’s 3.8 percent.
- Finally, here in the Midwest, sales were down 4.1 percent from October but unchanged from a year ago, while median price rose by 6.7 percent.
Housing Hampered by Marked Forces
Lawrence Yun, NAR’s chief economist, said a number of factors contributed to November’s weak sales.
“Home sales are hurt by higher mortgage interest rates [and] constrained inventory,” he said. “There is a pent-up demand for both rental and owner-occupied housing, as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction. As such, rents are rising at the fastest pace in five years, while annual home prices are rising at the highest rate in eight years.”
Will housing inventory increase in 2014? And how will home prices and sales respond? Stay tuned for our 2014 predictions coverage at the start of the year for some perspective on those issues and more.