Existing Home Sales Increase 2nd Straight Month

Existing home sales increased in November, the National Association of Realtors reported yesterday, the second consecutive monthly increase in an otherwise inconsistent year.

NAR said three of four regions saw sales activity gains last month as total existing home sales increased 1.9 percent from October to a seasonally adjusted rate of 5.32 million in November. However, sales remain down 7.0 percent from a year ago when they exceeded 5.7 million.

NAR Chief Economist Lawrence Yun called two consecutive months of existing home sales a “welcome sign” for the market. “The market conditions in November were mixed, with good signs of stabilizing home sales compared to recent months,” he said. “Rising inventory is clearly taming home price appreciation.”

Mortgage Bankers Association Senior Vice President and Chief Economist Mike Fratantoni noted the existing home sales increase was driven by more closings in the Northeast and Midwest. “Not surprisingly, the data showed continued deceleration in home-price gains, with the national increase moderating to 4.2 percent, in line with what we are seeing in other home-price measures,” he said.

Fratantoni said the sharpest deceleration in both prices and sales activity last month occurred in the West–the region with the most rapid price appreciation in recent years. “Given the affordability challenges in many of those markets, it makes sense that the region is seeing the most notable slowing of price gains,” he said.

The median existing home price for all housing types in November rose to $257,700, up 4.2 percent from a year ago, NAR reported. November’s price increase marked 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 but an increase from 1.67 million a year ago. Fratantoni said inventory often falls during this time of year. “But it is reassuring for prospective homebuyers to see an increase in available homes relative to last year as the lack of inventory has been a major constraint to purchase activity for quite some time,” he said.

NAR said properties typically stayed on the market for 42 days in November, up from 36 days in October and 40 days a year ago. More than 40 percent of homes sold in November remained on the market for less than a month.