Existing-home sales decreased in November, offsetting October’s gains. But Lawrence Yun, chief economist for the National Association of REALTORS®, says there’s no reason to believe the drop indicates a lasting downward trend heading into the new year.
Total existing-home sales—completed transactions for single-family homes, townhomes, condos, and co-ops—slipped 1.7% in November, reaching a seasonally adjusted annual rate of 5.35 million, NAR reported Thursday. However, sales are up 2.7% from a year ago. “Sales will be choppy when inventory levels are low, but the economy is otherwise performing very well, with more than 2 million job gains in the past year,” Yun notes.
Regionally, existing-home sales were up last month in the Northeast and Midwest, while the South and West posted declines. Here’s a closer look at some of the key indicators from NAR’s latest housing report, reflecting November data:
- Home prices: The median existing-home price for all housing types was $271,300, up 5.4% from a year ago.
- Days on the market: Forty-five percent of homes sold were on the market for less than a month. Properties stayed on the market for an average of 38 days, down from 42 days a year ago.
- Inventory: Total housing inventory was 1.64 million, a 7.3% decrease compared to October and down 5.7% from a year ago. Unsold inventory is currently at a 3.7-month supply at the current sales pace. Housing shortages are most noticeable in the entry-level price brackets. Fewer homes were sold below $250,000 compared to a year ago: a 16% decline for homes priced below $100,000 and a 4% decrease for homes priced between $100,000 to $250,000, NAR reports.
- First-time buyers: This cohort comprised 32% of sales, down slightly from 33% a year ago.
- All-cash sales: These transactions comprised 20% of sales, down slightly from 21% a year ago. Individual investors and second-home buyers tend to make up the bulk of cash sales. They purchased 16% of homes, up from 13% a year ago.
- Distressed sales: Foreclosures and short sales represented just 2% of sales, unchanged from a year ago.
“New-home construction seems to be coming to the market, but we are still not seeing the amount of construction needed to solve the housing shortage,” Yun says. “It is time for builders to be innovative and creative, possibly incorporating more factory-made modules to make houses affordable, rather than building homes all onsite.”
