Existing Home Sales Soar 5.6% in November, Strongest Pace in 11 Years

The National Association of Realtors (NAR) said existing home sales surged for the third straight month in November, growing at the strongest pace in 11 years.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, soared 5.6% to a seasonally adjusted annual rate of 5.81 million in November from an upwardly revised 5.50 million in October. After last month’s increase, sales are 3.8% higher than a year ago and are at their strongest pace since December 2006 (6.42 million).

“Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end,” Lawrence Yun, chief economist at NAR said. “As evidenced by a subdued level of first-time buyers and increased share of cash buyers, move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity last month. The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”

The median existing-home price was up 5.8% from November 2016 ($234,400) to $248,000. This month marks the 69th straight month of year-over-year price increases.

Total housing inventory at the end of November fell 7.2% to 1.67 million and is now 9.7% lower than a year ago (1.85 million). It has fallen year-over-year for 30 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace, which is down from 4.0 months a year ago.

“The anticipated rise in mortgage rates next year could further cut into affordability if these staggeringly low supply levels persist,” said Yun. “Price appreciation is too fast in a lot of markets right now. The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages.”

First-time buyers represented 29% of sales in November, down from 32% both in October and a year ago.

Regional Data

Existing home sales in the Northeast soared 6.7% to an annual rate of 800,000 and the median price in the Northeast was $273,600, which is 4.0% higher than November 2016.

In the Midwest, existing home sales shot up by 8.4% to an annual rate of 1.42 million in November, 6.8% higher than a year ago. The median price in the Midwest was $196,100, a 8.8% gain from a year ago.

In the South, they also jumped 8.3% to an annual rate of 2.34 million and are now 4.0% higher than a year ago. The median price in the South was $216,200, up 4.8% from a year ago.

In the West, they declined 2.3% to an annual rate of 1.25 million in November, but are still 2.5% above a year ago. The median price in the West was $375,100, up 8.2% from November 2016.